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Wage-Labor and Capital 



BY 

KARL MARX 

Author of "Capital," "Poverty of Philosophy," 

"Eighteenth Brumaire of Louis Bonaparte," 

"Value, Price, and Profit," etc. 



WITH PREFACE BY 

FREDERICK ENGELS 



TRANSLATED BY 

HARRIET E. LOTHROP, M.D. 



NEW YORK 

NEW YORK LABOR NEWS COMPANY 

1902 



LIBRARY of CONGRESS 
Tw© Copies Raeeived 

FEB 12 1904 

\ Copyright Entry 
bo^ / C - M c V 
CLASS CL XXc. No, 

dOPY'S 



Hft'6 




Copyright, 1902 
By new YORK LABOR NEWS COMPANY 



PUBLISHER'S NOTE 



In this volume are presented two of the earlier writ- 
ings of Karl Marx, with a special " Introduction " to 
each by Frederick Engels. 

The first, entitled Wage-Labor and Capital, was trans- 
lated for us by Dr. Harriet E. Lothrop, of Boston, 
from the standard German edition prepared by Engels 
in 1 89 1. This is the only complete English edition of 
it that has yet appeared, and its accuracy was doubly se- 
cured by a critical comparison of its every sentence with 
the German text, made at the request of the translator 
by Herman Simpson, of New York, who also added foot- . 
notes wherever comment seemed needful. In the perform- 
ance of their respective task, both kept in mind the all- 
important consideration, that in the works of Marx, as 
in all works, truly scientific, the exact expression is an 
essential factor and should not, therefore, be sacrificed 
to " literary style " in its transfer from one language to 
another. 

To those who are already acquainted with Marx's 
later essay on Value, Price, and Profit, this much earlier 
one on Wage-Labor and Capital will no doubt seem 
somewhat familiar. Still more familiar will both appear 
to the industrious reader of Capital. And for obvious 
reasons. In both are already promulgated, briefly yet 
comprehensively, the fundamental economic truths de- 



4 PUBLISHERS' NOTE 

veloped exhaustively, together with their many corol- 
laries and sequences, in the magistral work by which 
Marx is now better known than by any of his previous 
writings. It will be observed, however, that each of 
these two essays has its particular merits, and that both 
may be perused with benefit, even by the advanced 
student of Capital. For instance in Value, Price, and 
Profit, which was written in 1865 — or only four years 
before Capital appeared in print — the subject more 
specially considered is the " law of value," which Marx 
had by that time worked out to the utmost limit of per- 
fection ; whereas in Wage-Labor and Capital, which was 
written in the early part of 1849, the general proposi- 
tions are rather formulated than demonstrated, but are 
in greater number and variety, thus showing already the 
powerful framework of a vast structure, fully planned 
out, but requiring twenty years of patient labor for its 
completion. 

Of the discourse on Free Trade, which forms the sec- 
ond part of the present volume, the history is given by 
Engels in the " Introduction " that precedes it. The 
excellent translation of it that is presented here was 
first published some years ago by Lee and Shepard, of 
Boston. It is the work of Florence Kelley, who not only 
authorized us to use it, together with the introduction 
that Engels had written at her own request, but, most 
kindly also, revised our proofs. 

New York Labor News Company. 



CONTENTS 



rXGB 

Publishers* Note 3 

Introduction by Frederick Engels - - - - - 7 

CHAPTER 

I. Preliminary 19 

11. What Are Wages? 22 

III. By What is the Price of a Commodity Deter- 

mined? 27 

IV. By What are Wages Determined? - - - - 33 
V. The Nature and Growth of Capital . - - 36 

VI Relation of Wage-Labor to Capital - " - 39 

VII. The General Law that Determines the Rise and 

Fall of Wages and Profits - " - - - - 45 

VIII. The Interests of Capital and Wage-Labor are 
Diametrically Opposed — Effect of Growth 
of Productive Capital on Wages - - -49 

IX. Effect of Capitalist Competition on the Capi- 
talist Class, the Middle Class, and the 
Working Class - - - .- - - -54 



INTRODUCTION 



This pamphlet first "appeared in the form of a series of 
leading articles in the Neue Rheinische Zeitung, begin- 
ning April 4, 1849. The text is made up from lectures 
delivered by Marx before the German Workingmen's 
Club of Brussels in 1847. The series was never com- 
pleted. The promise " to be continued/' at the end of 
the editorial in Number 269 of the newspaper, remained 
unfulfilled in consequence of the precipitous events of 
that time : the invasion of Hungary by the Russians, and 
the uprisings in Dresden, Iserlohn, Elberfeld, the Palati- 
nate, and in Baden, which led to the suppression of the 
paper on the nineteenth of May, 1849. And among the 
papers left by Marx no manuscript of any continuation of 
these articles has been found. 

Wage-Labor and Capital has appeared as an inde- 
pendent publication in several editions, the last of which 
was issued by the Swiss Cooperative Printing Associa- 
tion, in Hottingen-Zurich, in 1884. Hitherto, the several 
editions have contained the exact wording of the original 
articles. But since at least ten thousand copies of the 
present edition are to be circulated as a propaganda tract, 
the question necessarily forced itself upon me. Would 
Marx himself, under these circumstances, have approved 
of an unaltered literal reproduction of the original? 

Marx, in the forties, had not yet completed his criticism 
of political economy. This was not done until toward 



8 INTRODUCTION 

the end of the fifties. Consequently, such of his writings 
as were pubHshed before the first instalment of his Critique 
of Political Economy was finished, deviate in some points 
from those written after 1859, and contain expressions 
and whole sentences which, viewed from the standpoint 
of his later writings, appear inexact, and even incorrect. 
Now, it goes without saying, that in ordinary edi- 
tions, intended for the public in general, this earlier 
standpoint, as a part of the intellectual development of 
the author, has its place; that the author, as well as the 
public, has an indisputable right to an unaltered reprint 
of these older writings. In such a case, I would not 
have dreamed of changing a single word in it. But it is 
otherwise when the edition is destined almost exclusively 
for the purpose of propaganda. In such a case, Marx 
himself would unquestionably have brought the old work, 
dating from 1849, i^^^o harmony with his new point of 
view, and I feel sure that I am acting in his spirit when I 
insert in this edition the few changes and additions which 
are necessary in order to attain this object in all essential 
points. Therefore I say to the reader at once : this 
pamphlet is not as Marx wrote it in 1849, ^^^ approxi- 
mately as Marx would have written it in 1891. More- 
over, so many copies of the original text are in circula- 
tion, that these will suffice until I can publish it again 
unaltered in a complete edition of Marx's works, to ap- 
pear at some future time. 

My alterations center about one point. According 
to the original reading, the worker sells his labor for 
wages, which he receives from the capitalist; according 
to the present text, he sells his labor-power. And for this 
change, I must render an explanation : to the workers, 
in order that they may understand that we are not dealing 
here with a quibble and word- juggling, but with one of 



INTRODUCTION 9 

the most important points in the whole range of political 
economy; to the bourgeois, in order that they may con- 
vince themselves how greatly the uneducated workers, 
who can be easily made to grasp the most difficult 
economic analyses, excel our supercilious " cultured " 
folk, for whom such ticklish problems remain insoluble 
their whole life long. 

Classical political economy* borrowed from the indus- 
trial practice the current notion of the manufacturer, that 
he buys and pays for the labor of his employees. This 
conception had been quite serviceable for the business 
purposes of the manufacturer, his bookkeeping and price 
calculation. But naively carried over into political 
economy, it there produced truly wonderful errors and 
confusions. 

Political economy finds it an established fact that the 
prices of all commodities, among them the price of the 
commodity which it calls " labor," continually change ; 
that they rise and fall in consequence of the most diverse 
circumstances, which often have no connection whatso- 
ever with the production of the commodities themselves, 
so that prices appear to be determined, as a rule, by pure 
chance. As soon, therefore, as political economy stepped 
forth as a science, it was one of its first tasks to search 
for the law that hid itself behind this chance, which ap- 
parently determined the prices of commodities, and which 
in reality controlled this very chance. Among the prices 

1 " By classical political economy I understand that economy which, since the time 
of W. Petty, has investigated the real relations of production in bourgeois society, in 
contradistinction to vulgar economy, which deals with appearances only, ruminates 
without ceasing on the materials long since provided by scientific economy, and there 
seeks plausible explanations of the most obtrusive phenomena for bourgeois daily use, 
but for the rest confines itself to systematizing in a pedantic way, and proclaiming for 
everlasting truths, trite ideas held by the self-complacent bourgeoisie with regard to 
their own world, to them the best of all possible worlds." (Karl Marx, Capital, p. 53.) 
Classical bourgeois economy closes with David Ricardo, its greatest representative. — 
Tr(i,n$l(^tor, 



lo INTRODUCTION 

of commodities, fluctuating and oscillating, now upward, 
now downward, the fixed central point was searched for 
around which these fluctuations and oscillations were 
taking place. In short : starting from the prices of com- 
modities, political economy sought for the value of com- 
modities as the regulating law, by means of which all 
price fluctuations could be explained, and to which they 
could all be reduced in the last resort. 

And so classical political economy found that the value 
of a commodity was determined by the labor incorporated 
in it and requisite to its production. With this explana- 
tion it was satisfied. And we too may for the present 
stop at this point. But to avoid misconceptions, I will 
remind the reader that to-day this explanation has be- 
come wholly inadequate. Marx was the first to investi- 
gate thoroughly into the value-forming quality of labor 
and to discover that not all labor which is apparently, 
or even really, necessary to the production of a com- 
modity, imparts under all circumstances to this com- 
modity a magnitude of value corresponding to the quan- 
tity of labor used up. If, therefore, we say to-day in 
short, with economists like Ricardo, that the value of a 
commodity is determined by the labor necessary to its 
production, we always imply the reservations and restric- 
tions made by Marx. Thus much for our present pur- 
pose ; further information can be found in Marx's Cri- 
tique of Political Economy, which appeared in 1859, ^^id 
in the first volume of Capital. 

But so soon as the economists applied this determina- 
tion of value by labor to the commodity *' labor," they 
fell from one contradiction into another. How is the 
value of 'Mabor " determined? By the necessary labor 
embodied in it. But how much labor is embodied in the 
labor of a laborer for a day, a week, a month, a year? 



INTRODUCTION n 

The labor of a day, a week, a month, a year. If labor is 
the measure of all values, we can express the " value 
of labor " only in labor. But we know absolutely noth- 
ing about the value of an hour's labor, if all that we 
know about it is that it is equal to one hour's labor. So 
thereby we have not advanced one hair's breadth nearer 
our goal ; we are constantly turning about in a circle. 

Classical economy, therefore, essayed another turn. It 
said : the value of a commodity is equal to its cost of pro- 
duction. But what is the cost of production of " labor " ? 
In order to answer this question, the economists are 
forced to strain logic just a little. Instead of investi- 
gating the cost of production of labor itself, which un- 
fortunately cannot be ascertained, they now investigate 
the cost of production of the laborer. And this latter 
can be ascertained. It changes according to time and cir- 
cumstances, but for a given condition of society, in a 
given locality, and in a given branch of production, it, 
too, is given, at least within quite narrow limits. We live 
to-day under the regime of capitalist production, under 
which a large and steadily growing class of the popula- 
tion can live only on the condition that it work for the 
owners of the means of production — tools, machines, raw 
materials, and means of subsistence — in return for wages. 
On the basis of this mode of production, the laborer's 
cost of production consists of the sum of the means of 
subsistence (or their price in money) which on the aver- 
age are requisite to enable him to work, to maintain in 
him this capacity for work, and to replace him at his de- 
parture, by reason of age, sickness, or death, with an- 
other laborer — that is to say, to propagate the working 
class in required numbers. 

Let us assume that the money-price of these means 
of subsistence averages 3 dollars a day. Our laborer 



12 INTRODUCTION 

gets therefore a daily wage of 3 dollars from his em- 
ployer. For this, the capitalist lets him work, say twelve 
hours a day. Our capitalist, moreover, calculates some- 
what in the following fashion: Let us assume that our 
laborer (a machinist) has to make a part of a machine 
which he finishes in one day. The raw material (iron 
and brass in the necessary prepared form) costs 20 
dollars. The consumption of coal by the steam-engine, 
the wear and tear of this engine itself, of the turning- 
lathe, and of the other tools with which our laborer 
works, represent for one day and one laborer a value of 
I dollar. The wages for one day are, according to our 
assumption, 3 dollars. This makes a total of 24 dollars for 
our piece of a machine. 

But the capitalist calculates that on an average he will 
receive for it a price of 2^ dollars from his customers, 
or 3 dollars over and above his outlay. 

Whence do the 3 dollars pocketed by the capitalist 
come? According to the assertion of classical political 
economy,, commodities are in the long run sold at their 
values, that is, they are sold at prices which correspond 
to the necessary quantities of labor contained in them. 
The average price of our part of a machine — 2J dollars 
— would therefore equal its value, i. e., equal the amount 
of labor embodied in it. But of these 2y dollars, 21 
dollars were values already existing before the machin- 
ist began to work; 20 dollars were contained in the 
raw material, i dollar in the fuel consumed during the 
work and in the machines and tools used in the process 
and reduced in their efficiency to the value of this 
amount. There remain 6 dollars, which have been 
added to the value of the raw material. But according 
to the supposition of our economists themselves, these 6 
dollars can arise only from the labor added to the raw 



INTRODUCTION 13 

material by the laborer. His twelve hours' labor has 
created, according to this, a new value of 6 dollars. 
Therefore, the value of his twelve hours' labor would be 
equivalent to 6 dollars. So we have at last discovered 
what the " value of labor " is. 

" Hold on there ! " cries our machinist. " Six dollars ? 
But I have received only 3 dollars! My capitalist 
swears high and dry that the value of my twelve hours' 
labor is no more than 3 dollars, and if I were to demand 
six, he'd laugh at me. What kind of a story is that ? " 

If before this we got with our value of labor into a 
vicious circle, we now surely have driven straight into 
an insoluble contradiction. We searched for the value 
of labor, and we found more than we can use. For the 
laborer the value of the twelve hours' labor is 3 dollars ; 
for the capitalist it is 6 dollars, of which he pays the 
workingman 3 dollars as wages, and pockets the remaining 
3 dollars himself. According to this, labor has not one, 
but two values, and, moreover, two very different values ! 

As soon as we reduce the values, now expressed in 
money, to labor-time, the contradiction becomes even 
more absurd. By the twelve hours' labor a new value 
of 6 dollars is created. Therefore in six hours the new 
value created equals 3 dollars — the amount which the 
laborer receives for twelve hours' labor. For twelve 
hours' labor the workingman receives, as an equivalent, 
the product of six hours' labor. We are thus forced to 
one of two conclusions : either labor has two values, one 
of which is twice as large as the other, or twelve equals 
six! In both cases we get pure absurdities. Turn and 
twist as we may, we will not get out of this contradiction 
as long as we speak of the buying and selling of " labor '* 
and of the " value of labor." And just so it happened to 
the political economists. The last offshoot of classical 



14 INTRODUCTION 

political economy — the Ricardian school — was largely 
wrecked on the insolubility of this contradiction. Classic 
political economy had run itself into a blind alley. The 
man who discovered the way out of this blind alley was 
Karl Marx. 

What the economists had considered as the cost of pro- 
duction of " labor " was really the cost of production, 
not of " labor/' but of the living laborer himself. And 
what this laborer sold to the capitalist was not his labor. 
" So soon as his labor really begins/' says Marx, " it 
ceases to belong to him, and therefore can no longer be 
sold by him." At the most, he could sell his future labor, 
i. ^./assume the obligation of executing a certain piece of 
work at a certain time. But in this way he does not sell 
labor (which would first have to be performed), but for 
a stipulated payment he places his labor-power at the 
disposal of the capitalist for a certain time (in case of 
time- wages), or for the performance of a certain task 
(in case of piece-wages). He hires out or sells his 
labor-power. But this labor-power has grown up with 
his person and is inseparable from it. Its cost of pro- 
duction therefore coincides with his own cost of produc- 
tion ; what the economists called the cost of production of 
labor is really the cost of production of the laborer, and 
therewith of his labor-power. And thus we can also go 
back from the cost of production of labor-power to the 
value of labor-power, and determine the quantity of social 
labor that is required for the production of a labor-power 
of a given quality, as Marx has done in the chapter on 
the " Buying and Selling of Labor-Power."^ 

Now what takes place after the worker has sold his 
labor-power, i. e., after he has placed his labor-power at 
the disposal of the capitalist for stipulated wages — 

1 Capital, vol. I, chapter vi. 



INTRODUCTION iS 

whether time-wages or piece-wages ? The capitalist takes 
the laborer into his workshop or factory, where all the 
articles required for the work can be found — raw mate- 
rials, auxiliary materials (coal, dyestuffs, etc.), tools and 
machines. Here the worker begins to toil. His daily 
wages are, as above, 3 dollars, and it makes no differ- 
ence whether he earns them as day-wages or piece-wages. 
We again assume that in twelve hours the worker adds 
by his labor a new value of 6 dollars to the value of 
the raw materials consumed, which new value the cap- 
italist realizes by the sale of the finished piece of work. 
Out of this new value he pays the worker his 3 dollars, 
and the remaining 3 dollars he keeps himself. If, now, 
the laborer creates in twelve hours a value of 6 dollars, 
in six hours he creates a value of 3 dollars. Conse- 
quently, after working six hours for the capitalist the 
laborer has returned to him the equivalent of the 3 dol- 
lars received as wages. After six hours' work both are 
quits, neither one owing a penny to the other. 

" Hold on there ! " now cries out the capitalist. *' I 
have hired the laborer for a whole day, for twelve hours. 
But six hours are only half a day. So work along lively 
there until the other six hours are at an end — only then 
will we be even." And, in fact, the laborer has to sub- 
mit to the conditions of the contract upon which he en- 
tered of " his own free will," and according to which he 
bound himself to work twelve whole hours for a product 
of labor which costs only six hours' labor. 

Similarly with piece-wages. Let us suppose that in 
twelve hours our worker makes twelve commodities. 
Each of these costs 2 dollars in raw material and wear 
and tear, and is sold for 2}^ dollars. On our former 
assumption, the capitalist gives the laborer one-fourth of 
a dollar for each piece, which makes a total of 3 dol- 



l6 INTRODUCTION 

lars for the twelve pieces. To earn this, the worker re- 
quires twelve hours. The capitalist receives 30 dollars 
for the twelve pieces; deducting 24 dollars for raw ma- 
terial and wear and tear, there remain 6 dollars, of 
which he pays 3 dollars in wages and pockets the re- 
maining 3. Just as before ! Here also the worker labors 
six hours for himself, i. e., to replace his wages (half an 
hour in each of the twelve hours), and six hours for the 
capitalist. 

The rock upon which the best economists were stranded 
as long as they started out from the value of labor, van- 
ishes as soon as we make our starting-point the value of 
lahor-power. Labor-power is, in our present-day capi- 
talist society, a commodity like every other commodity, 
but yet a very peculiar commodity. It has, namely, the 
peculiarity of being a value-creating force, the source of 
value, and, moreover, when properly treated, the source 
of more value than it possesses itself. In the present state 
of production, human labor-power not only produces in a 
day a greater value than it itself possesses and costs; 
but with each new scientific discovery, with each new 
technical invention, there also rises the surplus of its 
daily production over its daily cost, while as a consequence 
there diminishes that part of the working day in which the 
laborer produces the equivalent of his day's wages, and, on 
the other hand, lengthens that part of the working day in 
which he must present labor gratis to the capitalist. 

And this is the economic constitution of our entire 
modern society: the working class alone produces all 
values. For value is only another expression for labor, 
that expression, namely, by which is designated, in our 
capitalist society of to-day, the amount of socially neces- 
sary labor embodied in a particular commodity. But these 
values produced by the workers do not belong to the 



INTRODUCTION 17 

workers. They belong to the owners of the raw mate- 
rials, machines, tools, and money, which enable them to 
buy the labor-power of the working class. Hence, the 
working class gets back only a part of the entire mass 
of products produced by it. And as we have just seen, 
the other portion, which the capitalist class retains, and 
which it has to share, at most, only with the landlord 
class, is increasing with every new discovery and inven- 
tion, while the share which falls to the working class (per 
capita) rises but little and very slowly, or not at all, and 
under certain conditions it may even fall. 

But these discoveries and inventions which supplant one 
another with ever-increasing speed, this productiveness 
of human labor which increases from day to day to un- 
heard-of proportions, at last gives rise to a conflict, in 
which present capitalistic economy must go to ruin. On 
the one hand, immeasurable wealth and a superfluity of 
products with which the buyers cannot cope. On the 
other hand, the great mass of society proletarized, trans- 
formed into wage-laborers, and thereby disabled from ap- 
propriating to themselves that superfluity of products. 
The splitting up of society into a small class, immoder- 
ately rich, and a large class of wage-laborers devoid of 
all property, brings it about that this society smothers in 
its own superfluity, while the great majority of its mem- 
bers are scarcely, or not at all, protected from extreme 
want. This condition becomes every day more absurd 
and more unnecessary. It must be got rid of; it can be 
got rid of. A new social order is possible, in which the 
class differences of to-day will have disappeared, and in 
which — perhaps after a short transition period, which, 
though somewhat deficient in other respects, will in any 
case be very useful morally — there will be the means of 
life, of the enjoyment of life, and of the development and 



i8 INTRODUCTION 

activity of all bodily and mental faculties, through the 
systematic use and further development of the enormous 
productive powers of society, which exists with us even 
now, with equal obligation upon all to work. And that 
the workers are growing ever more determined to achieve 
this new social order will be proven on both sides of the 
ocean on this dawning May Day, and on Sunday, the third 
of May. 

Frederick Engels. 
London, April 30, 1891. 



WAGE-LABOR AND CAPITAL 



CHAPTER I 

PRELIMINARY 

From various quarters we have been reproached for 
neglecting to portray the economic conditions which form 
the material basis of the present struggles between classes 
and nations. With set purpose we have hitherto touched 
upon these conditions only when they forced themselves 
upon the surface of the political conflicts. 

It was necessary, beyond everything else, to follow the 
development of the class struggle in the history of our 
own day, and to prove empirically, by the actual and 
daily new-created historical material, that with the sub- 
jugation of the working class, accomplished in the days 
of February and March, the opponents of that class — the 
bourgeois republicans in France, and the bourgeois and 
peasant classes, who were fighting feudal absolutism 
throughout the whole continent of Europe — were simul- 
taneously conquered ; that the victory of the " moderate re- 
public " in France sounded, at the same time, the fall of the 
nations which had responded to the February revolution 
with heroic wars of independence; and finally, that by 
the victory over the revolutionary workingmen, Europe 
fell back into its old double slavery, into the English- 
Russian slavery. The June conflict in Paris, the fall of 
Vienna; the tragi-comedy in Berlin in November, 1848, 



20 WAGE LABOR AND CAPITAL 

the desperate efforts of Poland, Italy, and Hungary, the 
starvation of Ireland into submission — these were the 
chief events in which the European class struggle between 
bourgeoisie and working class was summed up, and from 
which we proved that every revolutionary uprising, how- 
ever remote from the class struggle its object might ap- 
pear, must of necessity fail until the revolutionary work- 
ing class will have conquered, that every social reform 
must remain a Utopia until the proletarian revolution and 
the feudalistic counter-revolution will have been pitted 
against each other in a world-wide war. In our presenta- 
tion, as in reality, Belgium and Switzerland were tragi- 
comic caricaturish genre pictures in the great historic 
tableau, the one the model State of the bourgeois mon- 
archy, the other the model State of the bourgeois republic ; 
both of them States that flatter themselves to be just as 
free from the class struggle as from the European revo- 
lution.^ 

But now, after our readers have seen the class struggle 
of the year 1848 develop into colossal political propor- 
tions, it is time to examine more closely the economic 
conditions themselves upon which is founded the exist- 
ence of the capitalist class and its class rule, as well 
as the slavery of the workers. 

We shall present in three great divisions : 

I. The relation of wage-labor to capital, the slavery of 
the worker, the sway of the capitalist, 

II. The inevitable ruin of the middle classes and the 
so-called commons^ under the present system. 

1 It must be remembered that this was written over fifty years ago. To-day, the 
class struggle in Switzerland, and especially in Belgium, has reached that degree of 
development where it compels recognition from even the most superficial observers of 
political and industrial life. — Translator. 

2 Peculiar to Europe, and originating in the rank of the freeman or burgher of 
feudal times ; citoyen, common, and Burger are equivalent terms. — Translator, 



PRELIMINARY 21 

III. The commercial subjugation and exploitation of 
the bourgeois classes of the various European nations by 
the despot of the world market — England.'^ 

We shall seek to portray this as simply and popularly 
as possible, and shall not presuppose a knowledge of even 
the most elementary notions of political economy. We 
wish to be understood by the workers. And, moreover, 
there prevails in Germany the most remarkable ignorance 
and confusion of ideas in regard to the simplest economic 
relations, from the patented defenders of existing con- 
ditions, down to the socialistic wonder-zvorkers and the 
unrecognized political geniuses, in which divided Ger- 
many is even richer than in duodecimo princelings. We 
therefore proceed first to the consideration of the first 
problem. 

1 As stated by Engels in the Introduction, the series of articles on Wage-Labor and 
Capital remained incomplete ; the pamphlet is confined almost exclusively to a con- 
sideration of the first "great division": the relation of wage-labor to capital.— 
Translator, 



CHAPTER II 

[WHAT ARE WAGES? 

If several workmen were to be asked : " How much 
wages do you get ? " one would reply, " I get a dollar a 
day from my employer " ; another, " I get two dollars a 
day," and so on. According to the different branches of 
industry in which they are employed, they would mention 
different sums of money that they receive from their 
respective employers for the completion of a certain task ; 
for example, for weaving a yard of linen, or for setting 
a page of type. Despite the variety of their statements, 
they would all agree upon one point: that wages are the 
amount of money which the capitalist pays for a cer- 
tain period of work or for a certain amount of work. 

Consequently it appears that the capitalist buys their 
labor with money, and that for money they sell him their 
labor. But this is merely an illusion. What they ac- 
tually sell to the capitalist for money is their labor-power. 
This labor-power the capitalist buys for a day, a week, 
a month, etc. And after he has bought it, he uses it up 
by letting the worker labor during the stipulated time. 
With the same amount of money with which the capital- 
ist has bought their labor-power, for example, with two 
dollars, he could have bought a certain amount of sugar 
or of any other commodity. The two dollars with which 
he bought twenty pounds of sugar is the price of the 
twenty pounds of sugar. The two dollars with which 
he bought twelve hours' use of the labor-power, is the 
price of twelve hours' labor. Labor-power, then, is a 



WHAT ARE WAGES? 23 

commodity, no more, no less so than is the sugar. The 
first is measured by the clock, the other by the scales. 

Their commodity, labor-power, the workers exchange 
for the commodity of the capitalist, for money, and, more- 
over, this exchange takes place at a certain ratio. So much 
money for so long a use of labor-power. For twelve hours* 
weaving, two dollars. And these two dollars, do they 
not represent all the other commodities which I can buy 
for two dollars ? Therefore, actually, the worker has ex- 
changed his commodity, labor-power, for commodities 
of all kinds, and moreover at a certain ratio. By giving 
him two dollars, the capitalist has given him so much 
meat, so much clothing, so much wood, light, etc., in ex- 
change for his day's work. The two dollars therefore 
expresses the relation in which labor-power is exchanged 
for other commodities, the exchange value of labor- 
power. The exchange value of a commodity estimated in 
money is called its price. Wages therefore are only a 
special name for the price of labor-power, and are usually 
called the price of work; it is the special name for the 
price of this peculiar commodity, which has no other re- 
pository than human flesh and blood. 

Let us take any worker, for example, a weaver. The 
capitalist supplies him with the loom and the yarn. The 
weaver applies himself to work, and the yarn is turned 
into cloth. The capitalist takes possession of the cloth 
and sells it for twenty dollars, for example. Now are 
the wages of the weaver a share of the cloth, of the twenty 
dollars, of the product of his work? By no means. 
Long before the cloth is sold, perhaps long before it is 
fully woven, the weaver has received his wages. The 
capitalist, then, does not pay his wages out of the money 
which he will obtain from the cloth, but out of money 
already on hand. Just as little as loom and yarn are the 



24 WAGE-LABOR AND CAPITAL 

product of the weaver to whom they are supplied by the 
employer, just so little are the commodities which he re- 
ceives in exchange for his commodity — labor-power — 
his product. It is possible that the employer found no pur- 
chasers at all for his cloth. It is possible that he did not 
get even the amount of the wages by its sale. It is pos- 
sible that he sells it very profitably in proportion to the 
weaver's wages. But all that does not concern the 
weaver. With a part of his existing wealth, of his cap- 
ital, the capitalist buys the labor-power of the weaver in 
exactly the same manner as, with another part of his 
wealth, he has bought the raw material — the yarn — and 
the instrument of work — the loom. After he has made 
these purchases, and among them belongs the labor-power 
necessary to the production of the cloth, he produces only 
with raw materials and instruments of labor belonging 
to him. For our good weaver, too, is one of the instru- 
ments of labor, and being in this respect on a par with 
the loom, he has no more share in the product (the cloth), 
or in the price of the product, than the loom itself has. 

Wages, therefore, are not a share of the worker in the 
commodities produced by himself. Wages are that part 
of already existing commodities with which the capital- 
ist buys a certain amount of productive labor-power. 

Consequently, labor-power is a commodity which its 
possessor, the wage-worker, sells to the capitalist. Why 
does he sell it? In order to Hve. 

But the putting of labor-power into action, i. e., the 
work, is the active expression of the laborer's own life. 
And this life activity he sells to another person in order 
to secure the necessary means of life. His life-activity, 
therefore, is but a means of securing his own existence. 
He works that he may keep alive. He does not count 
the labor itself as a part of his life ; it is rather a sacri- 



WHAT ARE WAGES? 25 

fice of his life. It is a commodity that he has auctioned 
off to another. The product of his activity, therefore, 
is not the aim of his activity. What he produces for him- 
self is not the silk that he weaves, not the gold that he 
draws up the mining shaft, not the palace that he builds. 
What he produces for himself is the wages, and silk, gold, 
and palace are resolved for him into a certain quantity 
of necessaries of life, perhaps into a cotton jacket, into 
copper coins, and into a basement dwelling. And the 
laborer who for twelve hours long, weaves, spins, bores, 
turns, builds, shovels, breaks stone, carries hods, and so 
on — is this twelve hours' weaving, spinning, boring, turn- 
ing, building, shoveling, stone-breaking, regarded by him 
as a manifestation of his life, as life ? Quite the contrary. 
Life for him begins where this activity ceases, at the 
table, at the tavern seat, in bed. The twelve hours' work, 
on the other hand, has no meaning for him as weaving, 
spinning, boring, and so on, but only as earnings, which 
enable him to sit down at a table, to take his seat in the 
tavern, and to lie down in a bed. 

If the silkworm's object in spinning were to prolong 
its existence as caterpillar, it would be a perfect example 
of a wage-worker. Labor-power was not always a 
commodity (merchandise). Labor was not always wage- 
labor, i. e., free labor. The slave did not sell his labor- 
power to the slave-owner, any more than the ox sells his 
laboring force to the farmer. The slave, together with his 
labor-power, was sold to his owner once for all. He is 
a commodity that can pass from the hand of one owner 
to that of another. He himself is a commodity, but his 
labor-power is not his commodity. The serf sells^ only a 

1 " Sells " is not a" very exact expression, for serfdom in its purity did not involve any 
relations of buying and selling between the serf and the lord of the manor, the tributes 
of the former to the latter consisting in labor and in kind. It is evident that Marx 
uses here the word " sells " in the general sense of alienation.— Translator, 



2 WAGE-LABOR AND CAPITAL 

portion of his labor-power. It is not he who receives 
wages from the owner of the land ; it is rather the owner 
of the land who receives a tribute from him. The serf 
belongs to the soil, and to the lord of the soil he brings 
its fruit. The free laborer, on the other hand, sells his 
very self, and that by fractions. He auctions off eight, 
ten, twelve, fifteen hours of his life, one day like the 
next, to the highest bidder, to the owner of raw mate- 
rials, tools, and means of life, i. e., to the capitalist. The 
laborer belongs neither to an owner nor to the soil, but 
eight, ten, twelve, fifteen hours of his daily life belong 
to whomsoever buys them. The worker leaves the cap- 
italist, to whom he has sold himself, as often as he chooses, 
and the capitalist discharges him as often as he sees fit, 
as soon as he no longer gets any use, or not the required 
use, out of him. But the worker, whose only source of 
income is the sale of his labor-power, cannot leave the 
zvhole class of buyers, i e., the capitalist class, unless he 
gives up his own existence. He does not belong to this 
or to that capitalist, but to the capitalist class; and it is for 
him to find his man, i. e., to find a buyer in this capital- 
ist class. 

Before entering more closely upon the relation of cap- 
ital to wage-labor, we shall present briefly the most gen- 
eral conditions which come into consideration in the de- 
termination of wages. 

Wages, as we have seen, are the price of a certain com- 
modity, labor-power. Wages, therefore, are determined 
by the same laws that determine the price of every other 
commodity. The question then is, How is the price of a 
commodity determined f 



CHAPTER III 

BY WHAT IS THE PRICE OF A COMMODITY DETERMINED? 

By what is the price of a commodity determined? 

By the competition between buyers and sellers, by the 
relation of the demand to the supply, of the call to the 
offer. The competition by which the price of a commod- 
ity is determined is three-fold. 

The same commodity is offered for sale by various sell- 
ers. Whoever sells commodities of the same quality most 
cheaply, is sure to drive the other sellers from the field 
and to secure the greatest market for himself. The sell- 
ers therefore fight among themselves for the sales, for 
tjie market. Each one of them wishes to sell, and to 
sell as much as possible, and if possible to sell alone, to 
the exclusion of all other sellers. Each one sells cheaper 
than the other. Thus there takes place a competition 
among the sellers which forces down the price of the 
commodities offered by them. 

But there is also a competition among the buyers; this 
upon its side causes the price of the proffered commod- 
ities to rise. 

Finally, there is competition between the buyers and the 
sellers; the ones wish to purchase as cheaply as possible, 
the others to sell as dearly as possible. The result of 
this competition between buyers and sellers will depend 
upon the relation between the two above-mentioned camps 
of competitors, i. e., upon whether the competition in the 
army of buyers or the competition in the army of sellers is 



28 WAGE-LABOR AND CAPITAL 

stronger. Industry leads two great armies into the field 
against each other, and each of these again is engaged in 
a battle among its own troops in its own ranks. The 
army among whose troops there is less fighting carries 
off the victory over the opposing host. 

Let us suppose that there are one hundred bales of 
cotton in the market and at the same time purchasers for 
one thousand bales of cotton. In this case the demand is 
ten times greater than the supply. Competition among 
the buyers, then, will be very strong; each of them tries 
to get hold of one bale, if possible of the whole hundred 
bales. This example is no arbitrary supposition. In the 
history of commerce we have experienced periods of 
scarcity of cotton, when some capitalists united together 
and sought to buy up not one hundred bales, but the whole 
cotton supply of the world. In the given case, then, one 
buyer seeks to drive the others from the field by offering 
a relatively higher price for the bales of cotton. The cot- 
ton sellers, who perceive the troops of the enemy in the 
most violent contention amiong themselves, and are there- 
fore fully assured of the sale of their w^hole one hun- 
dred bales, will beware of falling into one another's hair 
in order to force down the price of cotton at the very 
moment in which their opponents race with one another 
to screw it up high. So, all of a sudden, peace reigns 
in the army of sellers. They stand opposed to the buy- 
ers like one man, fold their arms in philosophic content, 
and their claims would find no Hmit, did not the offers of 
even the most importunate of the buyers have their very 
definite limit. 

If, then, the supply of a commodity is less than the 
demand for it, competition among the sellers is very slight, 
or there may be none at all among them. In the same 
proportion in which this competition decreases, the com- 



ARM AND HAMMER SERIES 

Edited by Lucien Sanial 



WAGE-LABOR AND CAPITAL 



In every historical epoch, the prevailing 
mode of economic production and exchange, 
and the social organization necessarily fol- 
lowing from it, form the basis upon which 
is built up, and from which alone can be 
explained, the political and intellectual his- 
tory of that epoch, — Karl Marx. 



THE PRICE OF A COMMODITY 29 

petition among the buyers increases. Result : a more or 
less considerable rise in the prices of commodities. 

It is well known that the opposite case, with opposite 
result, happens more frequently. Great excess of supply 
over demand; desperate competition among the sellers, 
and a lack of buyers; forced sales of commodities at 
ridiculously low prices. 

But what is a rise, and what a fall of prices ? What is 
a high, and what a low price? A grain of sand is high 
when examined through the microscope, and a tower is 
low when compared with a mountain. And if the price 
is determined by the relation of supply and demand, 
by what is the relation of supply and demand deter- 
mined ? 

Let us turn to the first worthy citizen we meet. He 
will not hesitate one moment, but, like another Alexander 
the Great, will cut this metaphysical knot with his mul- 
tiplication table. He will say to us : " If the production 
of the commodities which I sell has cost me one hundred 
dollars, and out of the sale of these goods I make one 
hundred and ten dollars — within the year, you under- 
stand — that's an honest, sound, reasonable profit. But if 
in the exchange I receive one hundred and twenty or 
one hundred and thirty dollars, that's a higher profit; 
and if I should get as much as two hundred dollars, that 
would be an extraordinary, an enormous profit." What 
is it, then, that serves this citizen as the standard of his 
profit ? The cost of the production of his commodities. If 
in exchange for these goods he receives a quantity of other 
goods whose production has cost less, he has lost. If 
he receives in exchange for his goods a quantity of other 
goods whose production has cost more, he has gained. 
And he reckons the falling or rising of the profit ac- 
cording to the degree at which the exchange value of his 



30 WAGE-LABOR AND CAPITAL 

goods stands, whether above or below his zero — the cost 
of production. 

We have seen how the changing relation of supply and 
demand causes now a rise, now a fall of prices ; now high, 
now low prices. If the price of a commodity rises con- 
siderably owing to a failing supply or a disproportionately 
growing demand, then the price of some other commodity 
must have fallen in proportion ; for of course the price of 
a commodity only expresses in money the proportion in 
which other commodities will be given in exchange for it. 
If, for example, the price of a yard of silk rises from two 
to three dollars, the price of silver has fallen in relation to 
the silk, and in the same way the prices of all other com- 
modities whose prices have remained stationary have fal- 
len in relation to the price of silk. A larger quantity of 
them must be given in exchange in order to obtain the 
same amount of silk. Now, what will be the consequence 
of a rise in the price of a particular commodity? A 
mass of capital will be thrown into the prosperous branch 
of industry, and this immigration of capital into the prov- 
inces of the favored industry will continue until it yields 
no more than the customary profits, or, rather, until the 
price of its products, owing to overproduction, sinks 
below the cost of production. 

Conversely: if the price of a commodity falls below 
its cost of production, then capital will be withdrawn 
from the production of this commodity. Except in the 
case of a branch of industry which has become obsolete 
and is therefore doomed to disappear, the production of 
such a commodity (that is, its supply), will, owing to 
this flight of capital, continue to decrease until it cor- 
responds to the demand, and the price of the commodity 
rises again to the level of its cost of production ; or, 
rather, until the supply has fallen below the demand and 



THE PRICE OF A COMMODITY 3^ 

its price has again risen above its cost of production, for 
the current price of a commodity is always either above 
or below its cost of production. 

We see how capital continually emigrates out of the 
province of one industry and immigrates into that of an- 
other. The high price produces an excessive immigra- 
tion, and the low price an excessive emigration. 

We could show, from another point of view, how not 
only the supply, but also the demand, is determined by 
the cost of production. But this would lead us too far 
away from our subject. 

We have just seen how the fluctuations of supply and 
demand always bring the price of a commodity back to 
its cost of production. The actual price of a commodity, 
indeed, stands always above or below the cost of pro- 
duction; but the rise and fall reciprocally balance each 
other, so that, within a certain period of time, if the ebbs 
and flows of the industry are reckoned up together, the 
commodities will be exchanged for one another in ac- 
cordance with their cost of production. Their price is 
thus determined by their cost of production. 

The determination of price by the cost of production 
is not to be understood in the sense of the bourgeois 
economists. The economists say that the average price 
of commodities equals the cost of production: that this is 
the law. The anarchic movement, in which the rise is 
compensated for by a fall and the fall by a rise, they 
regard as an accident. We might just as well consider 
the fluctuations as the law, and the determination of the 
price by cost of production as an accident — as is, 
in fact, done by certain other economists. But it is 
precisely these fluctuations which, viewed more closely, 
carry the most frightful devastation in their train, and, 
like an earthquake, cause bourgeois society to shake to 



32 WAGE-LABOR AND CAPITAL 

its very foundations — it is precisely these fluctuations that 
force the price to conform to the cost of production. 
In the totality of this disorderly movement is to be 
found its order. In the total course of this industrial 
anarchy, in this circular movement, competition balances, 
as it were, the one extravagance by the other. 

We thus see that the price of a commodity is indeed 
determined by its cost of production, but in such wise 
that the periods in which the price of these commodities 
rises above the cost of production are balanced by the 
periods in which it sinks below the cost of production, 
and vice versa. Of course this does not hold good for a 
single given product of an industry, but only for that 
branch of industry. So also it does not hold good for an 
individual manufacturer, but only for the whole class 
of manufacturers. 

The determination of price by cost of production is 
tantamount to the determination of price by the labor- 
time requisite to the production of a commodity, for 
the cost of production consists, first, of raw materials 
and wear and tear of tools, etc., i. e., of industrial 
products whose production has cost a certain number 
of work-days, which therefore represent a certain amount 
of labor-time, and, secondly, of direct labor, which is 
also measured by its duration. 



CHAPTER IV 

BY WHAT ARE WAGES DETERMINED? 

Now, the same general laws which regulate the price 
of commodities in general, naturally regulate wages, or 
the price of labor-power. Wages will now rise, now 
fall, according to the relation of supply and demand, 
according as competition shapes itself between the buyers 
of labor-power, the capitalists, and the sellers of labor- 
power, the workers. The fluctuations of wages corre- 
spond to the fluctuations in the price of commodities 
in general. But within the limits of these fluctuations 
the price of labor-power zvill be determined by the cost 
of its production, by the labor-time necessary for the 
production of this commodity: labor-power. 

What, then, is the cost of production of labor-power? 

It is the cost required for the maintenance of the 
laborer as a laborer, and for his education and training 
as a laborer. 

Therefore, the shorter the time required for training 
up to a particular sort of work, the smaller is the cost 
of production of the worker, the lower is the price of 
his labor-power, his wages. In those branches of 
industry in which hardly any period of apprenticeship 
is necessary and the mere bodily existence of the 
worker is sufficient, the cost of his production is 
limited almost exclusively to the commodities necessary 
for keeping him in working condition. The price of his 
work will therefore be determined by the price of the 
necessary means of subsistence. 



34 WAGE-LABOR AND CAPITAL 

Here, however, there enters another consideration. 
The manufacturer who calculates his cost of production 
and, in accordance with it, the price of the product, 
takes into account the wear and tear of the instruments 
of labor. If a machine costs him, for example, one 
thousand dollars, and this machine is used up in ten 
years, he adds one hundred dollars annually to the 
price of the commodities, in order to be able after ten 
years to replace the worn-out machine with a new one. 
In the same manner, the cost of production of simple 
labor-power must include the cost of propagation, by 
means of which the race of workers is enabled to 
multiply itself and to replace v/orn-out workers with 
new ones. The wear and tear of the worker, therefore, 
is calculated in the same manner as the wear and tear 
of the machine. 

Thus, the cost of production of simple labor-power 
amounts to the cost of the existence and propagation 
of the worker. The price of this cost of existence and 
propagation constitutes wages. The wages thus deter- 
mined are called the minimum of wages. This minimum 
wage, like the determination of the price of commodities 
in general by cost of production, does not hold good 
for the single individual, but only for the race. Indi- 
vidual workers, indeed, millions of workers, do not 
receive enough to be able to exist and to propagate 
themselves; but the wages of the whole working class 
adjust themselves, within the limits of their fluctuations, 
to this minimum. 

Now that we have come to an understanding in regard 
to the most general laws which govern wages, as well 
as the price of every other commodity, we can examine 
our subject more particularly. 



CHAPTER V 

THE NATURE AND GROWTH OF CAPITAL. 

Capital consists of raw materials, instruments of 
labor, and means of subsistence of all kinds, which are 
employed in producing new raw materials, new instru- 
ments, and new means of subsistence. All these com- 
ponents of capital are created by labor, products of 
labor, accumulated labor. Accumulated labor that serves 
as a means to new production is capital. So say the 
economists. What is a negro slave? A man of the 
black race. The one explanation is worthy of the 
other. 

A negro is a negro. Only under certain conditions 
does he become a slave. A cotton-spinning machine is 
a machine for spinning cotton. Only under certain 
conditions does it become capital. Torn away from 
these conditions, it is as little capital as gold by itself 
is money, or as sugar is the price of sugar. 

In the process of production, human beings work not 
only upon nature, but also upon one another. They 
produce only by working together in a specified manner 
and reciprocally exchanging their activities. In order 
to produce, they enter into definite connections and 
relations to one another, and only within these social 
connections and relations does their influence upon 
nature operate, i e., does production take place. 

These social relations between the producers, and the 
conditions under which they exchange their activities, 
and share in the total act of production, will naturally 



36 WAGE-LABOR AND CAPITAL 

vary according to the character of the means of pro- 
duction. With the discovery of a new instrument of 
warfare, the firearm, the whole internal organization 
of the army was necessarily altered, the relations within 
which individuals compose an army and can work as 
an army were transformed, and the relation of different 
armies to one another was likewise changed. 

We thus see that the social relations within which 
individuals produce, the social relations of production, 
are altered, transformed, with the change and develop- 
ment of the material means of production, of the forces 
of production. The relations of production in their 
totality constitute zvhat is called the social relations, 
society, and, moreover, a society at a definite stage of 
historic development, a society with peculiar, distinctive 
character. Ancient society, feudal society, bourgeois (or 
capitalist) society, are such totalities of relations of 
production, each of which denotes a particular stage of 
development in the history of mankind. 

Capital also is a social relation of production. It is 
a bourgeois relation of production, 3. relation of pro- 
duction of bourgeois society. The means of subsistence, 
the instruments of labor, the raw materials, of which 
capital consists — have they not been produced and 
accumulated under given social conditions, within defi- 
nite social relations? Are they not employed for new 
production, under given social conditions, within definite 
social relations? And does not just this definite social 
character stamp the products which serve for new pro- 
duction as capital f 

Capital consists not only of means of subsistence, 
instruments of labor, and raw materials, not only of 
material products: it consists just as much of exchange 
values. All products of which it consists are com- 



THE NATURE AND GROWTH OF CAPITAL 37 

modities. Capital, consequently, is not only a sum of 
material products, it is a sum of commodities, of 
exchange values, of social magnitudes. Capital remains 
the same whether we put cotton in the place of wool, 
rice in the place of wheat, steamships in the place of 
railroads, provided only that the cotton, the rice, the 
steamships — the body of capital — have the same ex- 
change value, the same price, as the wool, the wheat, the 
railroads, in which it was previously embodied. The 
bodily form of capital may transform itself continually, 
while capital does not suffer the least alteration. 

But though every capital is a sum of commodities, 
i. e., of exchange values, it does not follow that every 
sum of commodities, of exchange values, is capital. 

Every sum of exchange values is an exchange value. 
Each particular exchange value is a sum of exchange 
values. For example: a house worth one thousand 
dollars is an exchange value of one thousand dollars; 
a piece of paper worth one cent is a sum of exchange 
values of one hundred one-hundredths of a cent. 
Products which are exchangeable for others are com- 
modities. The definite proportion in which they are 
exchangeable forms their exchange value, or, expressed 
in money, their price. The quantity of these products 
can have no effect on their character as commodities, 
as representing an exchange value, as having a certain 
price. Whether a tree be large or small, it remains a 
tree. Whether we exchange iron in pennyweights or 
in hundred-weights for other products, does this alter 
its character: its being a commodity, an exchange value? 
According to the quantity, it is a commodity of greater 
or of lesser value, of higher or of lower price. 

How, then, does a sum of commodities, of exchange 
values, become capital? 



3^ WAGE-LABOR AND CAPITAL 

Thereby, that as an independent social power, i. e., as 
the power of a part of society, it preserves itself and 
multiplies by exchange with direct, living labor-power. 

The existence of a class which possesses nothing but 
the ability to work is a necessary presupposition of 
capital. 

It is only the dominion of past, accumulated, mate- 
rialized labor over immediate living labor that stamps 
the accumulated labor with the character of capital. 

Capital does not consist in the fact that accumulated 
labor serves living labor as a means for new production. 
It consists in the fact that living labor serves accumulated 
labor as the means of preserving and multiplying its 
exchange value. 



CHAPTER VI 

RELATION OF WAGE-LABOR TO CAPITAL 

What is it that takes place in the exchange between 
capitaHst and wage-laborer? 

The laborer receives means of subsistence in exchange 
for his labor-power; but the capitalist receives, in 
exchange for his means of subsistence, labor, the pro- 
ductive activity of the laborer, the creative force by 
which the worker not only replaces what he consumes, 
but also gives to the accumulated labor a greater value 
than it previously possessed. The laborer gets from 
the capitalist a portion of the existing means of sub- 
sistence. For vv^hat purpose do these means of subsist- 
ence serve him? For immediate consumption. But as 
soon as I consume means of subsistence, they are irrev- 
ocably lost to me, unless I employ the time during 
which these means sustain my life in producing new 
means of subsistence, in creating by my labor new values 
in place of the values lost in consumption. But it is 
just this noble reproductive power that the laborer sur- 
renders to the capitalist in exchange for means of 
subsistence received. Consequently, he has lost it for 
himself. 

Let us take an example. For one dollar a laborer works 
all day long in the fields of a farmer, to whom he thus 
secures a return of two dollars. The farmer not only 
receives the replaced value which he has given to the 
day-laborer; he has doubled it. Therefore he has con- 



40 WAGE-LABOR AND CAPITAL 

sumed the one dollar that he gave to the day-laborer 
in a fruitful, productive manner. For the one dollar 
he has bought the labor-power of the day-laborer, which 
creates products of the soil of twice the value, and out 
of one dollar makes two. The day-laborer, on the con- 
trary, receives in the place of his productive force, whose 
results he has just surrendered to the farmer, one dollar, 
which he exchanges for means of subsistence, which 
means of subsistence he consumes more or less quickly. 
The one dollar has therefore been consumed in a double 
manner — re productively for the capitalist, for it has been 
exchanged for labor-power, which brought forth two 
dollars; unproductively for the worker, for it has been 
exchanged for means of subsistence which are lost for- 
ever, and whose value he can obtain again only by 
repeating the same exchange with the farmer. Capital 
therefore presupposes wage-labor; wage-labor presup- 
poses capital. They condition each other; each brings 
the other into existence. 

Does a worker in a cotton factory produce only cotton 
goods? No. He produces capital. He produces values 
which serve anew to command his work and to create 
by means of it new values. 

Capital can multiply itself only by exchanging itself 
for labor-power, by calling wage-labor into life. The 
labor-power of the wage-laborer can exchange itself for 
capital only by increasing capital, by strengthening that 
very power whose slave it is. Increase of capital, there- 
fore, is increase of the proletariat, i. e., of the working 
class. 

And so, the bourgeoisie and its economists maintain 
that the interest of the capitalist and of the laborer is 
the same. And in fact, so they are! The worker 
perishes if capital does not keep him busy. Capital 



RELATION OF WAGE-LABOR TO CAPITAL 41 

perishes if it does not exploit labor-power, which, in 
order to exploit, it must buy. The more quickly the 
capital destined for production — the productive capital 
— increases, the more prosperous industry is, the more 
the bourgeoisie enriches itself, the better business gets, 
so many more workers does the capitalist need, so much 
the dearer does the worker sell himself. 

The fastest possible grozvth of productive capital is, 
therefore, the indispensable condition for a tolerable life 
to the laborer. 

But what is growth of productive capital? Growth 
of the power of accumulated labor over living labor; 
growth of the rule of the bourgeoisie over the working 
class. When wage-labor produces the alien wealth 
dominating it, the power hostile to it, capital, there 
flow back to it its means of employment, i. e., its 
means of subsistence, under the condition that it again 
become a part of capital, that it become again the lever 
whereby capital is to be forced into an accelerated 
expansive movement. 

To say that the interests of capital and the interests 
of the workers are identical, signifies only this, that 
capital and wage-labor are two sides of one and the 
same relation. The one conditions the other in the same 
way that the usurer and the borrower condition each 
other. 

As long as the wage-laborer remains a wage-laborer, 
his lot is dependent upon capital. That is what the 
boasted community of interests between worker and 
capitalists amounts to. 

If capital grows, the mass of wage-labor grows, the 
number of wage- workers increases ; in a word, the sway 
of capital extends over a greater mass of individuals. 

Let us suppose the most favorable case : if productive 



42 WAGE-LABOR AND CAPITAL 

capital grows, the demand for labor grows. It there- 
fore increases the price of labor-power, wages. 

A house may be large or small ; as long as the neigh- 
boring houses are likewise small, it satisfies all social 
requirements for a residence. But let there arise next 
to the little house a palace, and the little house shrinks 
into a hut. The little house now makes it clear that 
its inmate has no social position at all to maintain, or 
but a very insignificant one; and however high it may 
shoot up in the course of civilization, if the neighboring 
palace rises in equal or even in greater measure, the 
occupant of the relatively little house will always find 
himself more uncomfortable, more dissatisfied, more 
cramped within his four walls. 

An appreciable rise in wages presupposes a rapid 
growth of productive capital. Rapid growth of produc- 
tive capital calls forth just as rapid a growth of wealth, of 
luxury, of social needs and social pleasures. Therefore, 
although the pleasures of the laborer have increased, the 
social gratification which they afford has fallen in com- 
parison with the increased pleasures of the capitalist, 
which are inaccessible to the worker, in comparison with 
the stage of development of society in general. Our 
wants and pleasures have their origin in society; we 
therefore measure them in relation to society; we do not 
measure them in relation to the objects which serve for 
their gratification. Since they are of a social nature, they 
are of a relative nature. 

But wages are not at all determined merely by the sum 
of commodities for which they may be exchanged. Other 
factors enter into the problem. What the workers di- 
rectly receive for their labor-power is a certain sum of 
money. Are wages determined merely by this money 
price ? 



RELATION OF WAGE-LABOR TO CAPITAL 43 

In the sixteenth century the gold and silver circulation 
in Europe increased in consequence of the discovery of 
richer and more easily worked mines in America. The 
value of gold and silver, therefore, fell in relation to other 
commodities. The workers received the same amount of 
coined silver for their labor-power as before. The money 
price of their work remained the same, and yet their 
wages had fallen, for in exchange for the same amount 
of silver they obtained a smaller amount of other com- 
modities. This was one of the circumstances which fur- 
thered the growth of capital, the rise of the bourgeoisie, 
in the eighteenth century. 

Let us take another case. In the winter of 1847, i^ con- 
sequence of bad harvests, the most indispensable means of 
subsistence — grains, meat, butter, cheese, etc. — rose 
greatly in price. Let us suppose that the workers still re- 
ceived the same sum of money for their labor-power as 
before. Did not their wages fall ? To be sure. For the 
same money they received in exchange less bread, meat, 
etc. Their wages fell, not because the value of silver 
was less, but because the value of the means of subsistence 
had increased. 

Finally, let us suppose that the money price of labor- 
power remained the same, while all agricultural and man- 
ufactured commodities had fallen in price because of the 
employment of new machines, of favorable seasons, etc. 
For the same money the workers could now buy more 
commodities of all kinds. Their wages have therefore 
risen, just because their money value has not changed. 

The money price of labor-power, the nominal wages, do 
not therefore coincide with the actual or real wages, i e., 
with the amount of commodities which are actually given 
in exchange for the wages. If then we speak of a rise or 
fall of wages, we have to keep in mind not only the money 



44 WAGE-LABOR AND CAPITAL 

price of labor-power, the nominal wages, but also the real 
wages. 

But neither the nominal wages, i. e., the amount of 
money for which the laborer sells himself to the capitalist, 
nor the real wages, i. e., the amount of commodities which 
he can buy for this money, exhausts the relations which 
are comprehended in the term wages. 

Wages are determined above all by their relation to the 
gain, the profit, of the capitalist. In other words, wages 
are a proportionate, relative quantity. 

Real wages express the price of labor-power in relation 
to the price of other commodities ; relative wages, on the 
other hand, express the share of immediate labor in the 
value newly created by it, in relation to the share of it 
which falls to accumulated labor, to capital. 



CHAPTER VII 

THE GENERAL LAW THAT DETERMINES THE RISE AND FALL 
OF WAGES AND PROFITS 

We have said : " Wages are not a share of the worker 
in the commodities produced by him. Wages are that 
part of already existing commodities with which the cap- 
itaHst buys a certain amount of productive labor-power." 
But the capitalist must replace these wages out of the 
price for which he sells the product made by the worker ; 
he must so replace it that, as a rule, there remains to him 
a surplus above the cost of production expended by him, 
that is, he must get a profit. The selling price of the 
commodities produced by the worker is divided, from the 
point of view of the capitalist, into three parts : First, the 
replacement of the price of the raw materials advanced by 
him, in addition to the replacement of the wear and tear 
of the tools, machines, and other instruments of labor 
likewise advanced by him ; second, the replacement of the 
wages advanced; and third, the surplus left over, i. e., 
the profit of the capitalist. While the first part merely 
replaces previously existing values, it is evident that 
the replacement of the wages and the surplus (the 
profit of capital) are as a whole taken out of the new 
value, which is produced by the labor of the worker and 
added to the raw materials. And in this sense we can 
view wages as well as profit, for the purpose of compar- 
ing them with each other, as shares in the product of the 
worker. 



46 WAGE-LABOR AND CAPITAL 

Real wages may remain the same, they may even rise, 
nevertheless the relative wages may fall. Let us suppose, 
for instance, that all means of subsistence have fallen two- 
thirds in price, while the day's wages have fallen but one- 
third ; for example, from three to two dollars. Although 
the worker can now get a greater amount of commodi- 
ties with these two dollars than he formerly did with 
three dollars, yet his wages have decreased in proportion 
to the gain of the capitalist. The profit of the capitalist 
— the manufacturer's, for instance — has increased by 
one dollar, which means that for a smaller amount of ex- 
change values, which he pays to the worker, the latter 
must produce a greater amount of exchange values 
than before. The share of capital in proportion to the 
share of labor has risen. The distribution of social 
wealth between capital and labor has become still more 
unequal. The capitalist commands a greater amount of 
labor with the same capital. The power of the capital- 
ist class over the working class has grown, the social posi- 
tion of the worker has become worse, has been forced 
down still another degree below that of the capitalist. 

What, then, is the general law that determines the rise 
and fall of zvages and profit in their reciprocal relation? 

They stand in inverse proportion to each other. The 
share of capital {profit) increases in the same proportion 
in zvhich the share of labor {zvages) falls, and vice versa. 
Profit rises in the same degree in which wages fall; it 
falls in the same degree in zvhich wages rise. 

It might perhaps be argued that the capitalist can gain 
by an advantageous exchange of his products with other 
capitalists, by a rise in the demand for his commodities, 
v/hether in consequence of the opening up of new markets, 
or in consequence of temporarily increased demands in 
the old markets, and so on ; that the profit of the capital- 



GENERAL LAW OF WAGES AND PROFITS 47 

ist, therefore, may be multiplied by taking advantage of 
other capitalists, independently of the rise and fall of 
wages, of the exchange value of labor-power ; or that the 
profit of the capitalist may also rise through improve- 
ments in the instruments of labor, new applications of the 
forces of nature, and so on. 

But in the first place it must be admitted that the result 
remains the same, although brought about in an opposite 
manner. Profit, indeed, has not risen because wages 
have fallen, but wages have fallen because profit has 
risen. With the same amount of another man's labor the 
capitalist has bought a larger amount of exchange values 
without having paid more for the labor on that account, 
i. e.j the work is paid for less in proportion to the net 
gain which it yields to the capitalist. 

In the second place, it must be borne in mind that, de- 
spite the fluctuations in the prices of commodities, the 
average price of every commodity, the proportion in 
which it exchanges for other commodities, is determined 
by its cost of production. The acts of overreaching and 
taking advantage of one another within the capitalist 
ranks necessarily equalize themselves. The improve- 
ments of machinery, the new applications of the forces 
of nature in the service of production, make it possible to 
produce in a given period of time, with the same amount 
of labor and capital, a larger amount of products, but in 
no wise a larger amount of exchange values. If by the 
use of the spinning-machine I can furnish twice as much 
yarn in an hour as before its invention — for instance, one 
hundred pounds instead of fifty pounds — in the long run 
I receive back, in exchange for this one hundred pounds, 
no more commodities than I did before for fifty ; because 
the cost of production has fallen by one-half, or because I 
can furnish double the product at the same cost. 



48 WAGE-LABOR AND CAPITAL 

Finally, in whatsoever proportion the capitalist class, 
whether of one country or of the entire world-market, 
distribute the net revenue of production among them- 
selves, the total amount of this net revenue always con- 
sists exclusively of the amount by which accumulated 
labor has been increased from the proceeds of direct labor. 
This whole amount, therefore, grows in the same pro- 
portion in which labor augments capital, i. e., in the same 
proportion in which profit rises as compared with wages. 



CHAPTER VIII 

THE INTERESTS OF CAPITAL AND WAGE-LABOR ARE DIAMET- 
RICALLY OPPOSED — EFFECT OF GROWTH OF PRO- 
DUCTIVE CAPITAL ON WAGES 

We thus see that, even if zve keep ourselves within the 
relation of capital and wage-labor, the interests of capital 
and the interests of zvage-labor are diametrically opposed 
to each other. 

A rapid growth of capital is synonymous with a rapid 
growth of profits. Profits can grow rapidly only when 
the price of labor — the relative wages — decrease just 
as rapidly. Relative wages may fall, although the real 
wages rise simultaneously with the nominal wages, with 
the money value of labor, provided only that the real 
wage does not rise in the same proportion as the profit. 
If, for instance, in good business years wages rise five per 
cent, while profits rise thirty per cent., the proportional, 
the relative wage has not increased, but decreased. 

If, therefore, the income of the worker increases with 
the rapid growth of capital, there is at the same time a 
widening of the social chasm that divides the worker from 
the capitalist, an increase in the power of capital over 
labor, a greater dependence of labor upon capital. 

To say that " the worker has an interest in the rapid 
growth of capital," means only this : that the more speed- 
ily the worker augments the wealth of the capitalist, the 
larger will be the crumbs which fall to him, the greater 



wag 



50 WAGE-LABOR AND CAPITAL 

will be the number of workers that can be called into 
existence, the more can the mass of slaves dependent upon 
capital be increased. 

We have thus seen that even the most favorable situa- 
tion for the working class, namely, the most rapid growth 
of capital, however much it may improve the material life 
of the worker, does not abolish the antagonism between 
his interests and the interests of the capitalist. Profit and 
wages remain as before, in inverse proportion. 

f capital grows rapidly, wages may rise, but the profit 
of capital rises disproportionately faster. The material 
position of the worker has improved, but at the cost of 
his social position. The social chasm that separates him 
from the capitalist has widened. 

Finally, to say that " the most favorable condition for 
wage-labor is the fastest possible growth of produc- 
tive capital," is the same as to say : the quicker the work- 
ing class multiplies and augments the power inimical to it 
— the wealth of another which lords it over that class — 
the more favorable will be the conditions under which it 
will be permitted to toil anew at the multiplication of 
bourgeois wealth, at the enlargement of the power of 
capital, content thus to forge for itself the golden chains 
by which the bourgeoisie drags it in its train. 

Growth of productive capital and rise of wages, are 
they really so indissolubly united as the bourgeois econo- 
mists maintain? We must not beHeve their mere words. 
We dare not believe them even when they claim that the 
fatter capital is the more will its slave be pampered. The 
bourgeoisie is too much enlightened, it keeps its accounts 
much too carefully, to share the prejudices of the feudal 
lord, who makes an ostentatious display of the magnifi- 
cence of his retinue. The conditions of existence of the 
bourgeoisie compel it to attend carefully to its bookkeep- 



CAPITAL VERSUS WAGE-LABOR 5^ 

ing. We must therefore examine more closely into the 
following question : — 

In what manner, does the growth of productive capital 
affect wages? 

If, as a whole, the productive capital of bourgeois so- 
ciety grows, there takes place a more many-sided accu- 
mulation of labor. The individual capitals increase in num- 
ber and in magnitude. The multiplication of individual 
capitals increases the competition among capitalists. The 
increasing magnitude of individual capitals provides the 
means for leading more powerful armies of workers with 
more gigantic instruments of war upon the industrial 
battlefield. 

The one capitalist can drive the other from the field 
and carry off his capital only by selling more cheaply. 
In order to sell more cheaply without ruining himself, 
he must produce more cheaply, i. e., increase the produc- 
tive force of labor as much as possible. But the pro- 
ductive force of labor is increased above all by a greater 
division of labor and by a more general introduction and 
constant improvement of machinery. The larger the 
army of workers among whom the labor is subdivided, 
the more gigantic the scale upon which machinery is in- 
troduced, the more in proportion does the cost of produc- 
tion decrease, the more fruitful is the labor. And so there 
arises among the capitalists a universal rivalry for the 
increase of the division of labor and of machinery and for 
their exploitation upon the greatest possible scale. If, 
now, by a greater division of labor, by the application and 
improvement of new machines, by a more advantageous 
exploitation of the forces of nature on a larger scale, a 
capitalist has found the means of producing with the 
same amount of labor (whether it be direct or accumu- 
lated labor) a larger amount of products, of commodities, 



52 WAGE-LABOR AND CAPITAL 

than his competitors — if, for instance, he can produce a 
whole yard of linen in the same labor-time in which his 
competitors weave half a yard — how will this capitalist 
act? 

He could keep on selling half a yard of linen at the 
old market price; but this would not have the effect of 
driving his opponents from the field and enlarging his 
own market. But his need of a market has increased in 
the same measure in which his productive power has ex- 
tended. The more powerful and costly means of produc- 
tion that he has called into existence enable him, it is true, 
to sell his wares more cheaply, but they compel him at 
the same time to sell more wares, to get control of a very 
much greater market for his commodities ; consequently, 
this capitalist will sell his half yard of linen more cheaply 
than his competitors. 

But the capitalist will not sell the whole yard so cheaply 
as his competitors sell the half yard, although the produc- 
tion of the whole yard costs no more to him than does that 
of the half yard to the others. Otherwise he would make 
no extra profit, and would get back in exchange only the 
cost of production. He might obtain a greater income 
from having set in motion a larger capital, but not from 
having made a greater profit on his capital than the others. 
Moreover, he attains the object he is aiming at if he prices 
his goods only a small percentage lower than his com- 
petitors. He drives them off the field, he wrests from 
them at least a part of their market, by underselling them. 

And finally, let us remember that the current price al- 
ways stands either above or below the cost of production, 
according as the sale of a commodity takes place in the 
favorable or unfavorable period of the industry. Accord- 
ing as the market price of the yard of linen stands above 
or below its former cost of production, will the percentage 



CAPITAL VERSUS WAGE-LABOR 53 

vary at which the capitalist who has made use of the new 
and more fruitful means of production sells above his real 
cost of production. 

But the privilege of our capitalist is not of long dura- 
tion. Other competing capitalists introduce the same 
machines, the same division of labor, and introduce them 
upon the same or even upon a greater scale. And finally 
this introduction becomes so universal that the price of the 
linen is lowered not only below its old, but even below its 
new cost of production. 

The capitalists therefore find themselves, in their mu- 
tual relations, in the same situation in which they were 
before the introduction of the new means of production ; 
and if they are by these means enabled to offer double the 
product at the old price, they are now forced to furnish 
double the product for less than the old price. Havmg 
arrived at the new point, the new cost of production, the 
battle for supremacy in the market has to be fought out 
anew. Given more division of labor and more machinery, 
and there results a greater scale upon which division of 
labor and machinery are exploited. And competition 
again brings the same reaction against this result. 



CHAPTER IX' 

EFFECT OF CAPITALIST COMPETITION ON THE CAPITALIST 
CLASS^ THE MIDDLE CLASS^ AND THE WORKING CLASS. 

We thus see how the method of production and the 
means of production are constantly enlarged, revolution- 
ized, how division of labor necessarily draws after it 
greater division of labor, the employment of machinery 
greater employment of machinery, work upon a large 
scale work upon a still greater scale. This is the law that 
continually throws capitalist production out of its old 
ruts and compels capital to strain ever more the productive 
forces of labor for the very reason that it has already 
strained them — the law that grants it no respite, and 
constantly shouts in its ear : March ! march ! 

This is no other law than that which, within the period- 
ical fluctuations of commerce, necessarily adjusts the 
price of a commodity to its cost of production. 

No matter how powerful the means of production 
which a capitalist may bring into the field, competition 
will make their adoption general; and from the moment 
that they have been generally adopted, the sole result of 
the greater productiveness of his capital will be that he 
must furnish at the same price, ten, twenty, one hundred 
times as much as before. But since he must find a mar- 
ket for, perhaps, a thousand times as much, in order to 
outweigh the lower selling price by the greater quantity 
of the sales ; since now a more extensive sale is necessary 
not only to gain a greater profit, but also in order to re- 
place the cost of production (the instrument of produc- 



EFFECT OF CAPITALIST COMPETITION 55 

tion itself grows always more costly, as we have seen), 
and since this more extensive sale has become a question 
of life and death not only for him, but also for his rivals, 
the old struggle must begin again, and it is all the more 
violent the more powerful the means of production al- 
ready invented are. The division of labor and the appli- 
cation of machinery zvill therefore take a fresh start, and 
upon an even greater scale. 

Whatever be the power of the means of production 
which are employed, competition seeks to rob capital of 
the golden fruits of this power by reducing the price of 
commodities to the cost of production ; in the same meas- 
ure in which production is cheapened, i. e., in the same 
measure in which more can be produced with the same 
amount of labor, it compels by a law which is irresistible 
a still greater cheapening of production, the sale of ever 
greater masses of product for smaller prices. Thus the 
capitalist will have gained nothing more by his efforts 
than the obligation to furnish a greater product in the 
same labor-time ; in a word, more difficult conditions for 
the profitable employment of his capital. While com- 
petition, therefore, constantly pursues him with its law of 
the cost of production and turns against himself every 
weapon that he forges against his rivals, the capitalist 
continually seeks to get the best of competition by rest- 
lessly introducing further subdivision of labor and new 
machines, which, though more expensive, enable him to 
produce more cheaply, instead of waiting until the new 
machines shall have been rendered obsolete by compe- 
tition. 

If we now conceive this feverish agitation as it operates 
in the market of the whole world, we shall be in a position 
to comprehend how the growth, accumulation, and con- 
centration of capital bring in their train an evermore de- 

LofC. 



$6 WAGE-LABOR AND CAPITAL 

tailed subdivision of labor, an ever greater improvement 
of old machines, and a constant application of new ma- 
chines • — a process which goes on uninterruptedly, with 
feverish haste, and upon an evermore gigantic scale. 

But what effect do these conditions, which are insepar- 
able from the growth of productive capital, have upon the 
determination of wages? 

The greater division of labor enables one laborer to ac- 
complish the work of five, ten, or twenty laborers; it 
therefore increases competition among the laborers five- 
fold, tenfold, or twentyfold. The laborers compete not 
only by selling themselves one cheaper than the other, 
but also by one doing the work of five, then ten, or 
twenty ; and they are forced to compete in this manner by 
the division of labor, which is introduced and steadily 
improved by capital. 

Furthermore, to the same degree in which the division 
of labor increases, is the labor simplified. The special 
skill of the laborer becomes worthless. He becomes trans- 
formed into a simple monotonous force of production, 
with neither physical nor mental elasticity. His work 
becomes accessible to all; therefore competitors press 
upon him from all sides. Moreover, it must be re- 
membered that the more simple, the more easily learned 
the work is, so much the less is its cost of production, the 
expense of its acquisition, and so much the lower must the 
wages sink — for, like the price of any other commodity, 
they are determined by the cost of production. Therefore, 
in the same measure in which labor becomes more unsatis- 
factory, more repulsive, does competition increase and 
wages decrease. The laborer seeks to maintain the total 
of his wages for a given time by performing more labor, 
either by working a greater number of hours, or by ac- 
complishing more in the same number of hours. Thus, 



EFFECT OF CAPITALIST COMPETITION 57 

urged on by want, he himself muUipUes the disastrous 
effects of division of labor. The result is: the more he 
works, the less wages he receives. And for this simple 
reason : the more he works, the more he competes against 
his fellow workmen, the more he compels them to compete 
against him, and to offer themselves on the same wretched 
conditions as he does; so that, in the last analysis, he 
competes against himself as a member of the working class. 

Machinery produces the same effects, but upon a much 
larger scale. It supplants skilled laborers by unskilled, 
men by women, adults by children; where newly intro- 
duced, it throws the workers upon the streets in great 
masses; and as it becomes more highly developed and 
more productive it discards them in additional though 
smaller numbers. 

We have hastily sketched in broad outlines the indus- 
trial war of capitalists among themselves. This war has 
the peculiarity that the battles in it are won less by recruit- 
ing than by discharging the army of zvorkers. The gen- 
erals {the capitalists) vie with one another as to zvho 
can discharge the greatest number of industrial soldiers. 

The economists tell us, to be sure, that those laborers 
who have been rendered superfluous by machinery find 
new avenues of employment. They dare not assert di- 
rectly that the same laborers that have been discharged 
find situations in new branches of labor. Facts cry out 
too loudly against this lie. Strictly speaking, they only 
maintain that new means of employment will be found 
for other sections of the zvorking class; for example, for 
that portion of the young generation of laborers who were 
about to enter upon that branch of industry which had 
just been abolished. Of course, this is a great satisfac- 
tion to the disabled laborers. There will be no lack of 
fresh exploitable blood and muscle for the Messrs. Capi- 



SS WAGE-LABOR AND CAPITAL 

talists — the dead may bury their dead. This consola- 
tion seems to be intended more for the comfort of the 
capitalists themselves than of their laborers. If the whole 
class of the wage-laborers were to be annihilated by ma- 
chinery, how terrible that would be for capital, which, 
without wage-labor, ceases to be capital! 

But even if we assume that all who are directly forced 
out of employment by machinery, as well as all of the ris- 
ing generation who were waiting for a chance of employ- 
ment in the same branch of industry, do actually find 
some new employment : — are we to believe that this new 
employment would pay as high wages as the one they 
have lost? If it did, it would be in contradiction to all the 
laws of political economy. We have seen how modern 
industry always tends to the substitution of the simpler 
and more subordinate employments for the higher and 
more complex ones. How, then, could a mass of workers 
thrown out of one branch of industry by machinery find 
refuge in another branch, unless they were to be paid 
more poorly? 

An exception to the law has been adduced, namely, the 
workers who are employed in the manufacture of machin- 
ery itself. As soon as there is in industry a greater de- 
mand for and a greater consumption of machinery, it is 
said that the number of machines must necessarily in- 
crease ; consequently, also, the manufacture of machines ; 
consequently, also, the employment of workers in machine 
manufacture ; — and the workers employed in this branch 
of industry are skilled, even educated, workers. 

Since the year 1840 this assertion, which even before 
that date was only half true, has lost all semblance of 
truth; for the most diverse machines are now applied to 
the manufacture of the machines themselves on quite as 
extensive a scale as in the manufacture of cotton yarn, 



EFFECT OF CAPITALIST COMPETITION 59 

and the laborers employed in machine factories can but 
play the role of very stupid machines alongside of the 
highly ingenious machines. 

But in place of the man who has been dismissed by the 
machine, the factory may employ, perhaps, three children 
and one woman! And must not the wages of the man 
have previously sufficed for the three children and one 
woman ? Must not the minimum wages have sufficed for 
the preservation and propagation of the race? What, 
then, do these beloved bourgeois phrases prove? Noth- 
ing more than that now four times as many workers' 
lives are used up as there were previously, in order to 
obtain the livelihood of one working family. 

To sum up: the more productive capital grows, tlw 
more it extends the division of labor and the application of 
machinery; the more the division of labor and the applica- 
tion of machinery extend, the more does competition ex- 
tend among the workers, the more do their wages shrink 
together. ^ 

In addition, the working class is also recruited from 
the higher strata of society; a mass of small business 
men and of people living upon the interest of their cap- 
itals is precipitated into the ranks of the working class, 
and they will have nothing else to do than to stretch out 
their arms alongside of the arms of the workers. Thus 
the forest of outstretched arms, begging for work, grows 
ever thicker, while the arms themselves grow ever leaner. 

It is evident that the small manufacturer cannot sur- 
vive in a struggle in which the first condition of success 
is production upon an ever greater scale. It is evident 
that the small manufacturer cannot at the same time be 
a big manufacturer. 

That the interest on capital decreases in the same ratio 
in which the mass and number of capitals increase, that 



6o WAGE-LABOR AND CAPITAL 

it diminishes with the growth of capital, that therefore 
the small capitalist can no longer live on his interest, 
but must consequently throw himself upon industry by 
joining the ranks of the small manufacturers and thereby 
increasing the number of candidates for the proletariat — 
all this requires no further elucidation. 

Finally, in the same measure in which the capitalists are 
compelled, by the movement described above, to exploit 
the already existing gigantic means of production on an 
ever-increasing scale, and for this purpose to set in mo- 
tion all the mainsprings of credit, in the same measure do 
they increase the industrial earthquakes, in the midst of 
which the commercial world can preserve itself only by 
sacrificing a portion of its wealth, its products, and even 
its forces of production, to the gods of the lower world 
— in short, the crises increase. They become more fre- 
quent and more violent, if for no other reason, then for 
this alone, that in the same measure in which the mass of 
products grows, and therefore the needs for extensive 
markets, in the same measure does the world market 
shrink evermore, and ever fewer markets remain to be 
exploited, since every previous crisis has subjected to the 
commerce of the world a hitherto unconquered or but 
superficially exploited market. But capital not alone lives 
upon labor. Like a master, at once distinguished and bar- 
barous, it drags with it into its grave the corpses of its 
slaves, whole hecatombs of workers, who perish in the 
crises. We thus see that if capital grows rapidly, competi- 
tion among the zvorkers grows with even greater rapidity, 
i. e., the means of employment and subsistence for the 
working class decrease in proportion even more rapidly; 
hut this notwithstanding, the rapid growth of capital is 
the most favorable condition for wage-labor. 



FREE TRADE 

AN ADDRESS DELIVERED BEFORE THE DEMOCRATIC 

ASSOCIATION OF BRUSSELS, BELGIUM, 

JANUARY 9, 1848. 

BY 

KARL MARX ' 

TRANSLATED BY 

FLORENCE KELLEY 

WITH PREFACE BY 

FREDERICK ENGELS 



INTRODUCTION 



Towards the end of 1847, a Free Trade Congress was 
held at Brussels. It was a strategic move in the free 
trade campaign then carried on by the English manu- 
facturers. Victorious at home by the repeal of the Com 
Laws in 1846, they now invaded the Continent in order 
to demand, in return for the free admission of continental 
corn into England, the free admission of English manu- 
factured goods to the continental markets. At this Con- 
gress, Marx inscribed himself on the list of speakers ; but, 
as might have been expected, things were so managed 
that before his turn came on, the Congress was closed. 
Thus, what Marx had to say on the free trade ques- 
tion, he was compelled to say before the Democratic 
Association of Brussels, an international body of which 
he was one of the vice-presidents. 

The question of free trade or protection being at 
present on the order of the day in America, it has been 
thought useful to publish an English translation of 
Marx's speech, to which I have been asked to write an 
introductory preface. 

"The system of protection," says Marx,^ "was an 
artificial means of manufacturing manufacturers, of ex- 
propriating independent laborers, of capitalizing the na- 
tional means of production and subsistence, and of forci- 

* Karl Marx, Capital. London : Swan Sonnenschein Co,, 1886 ; p. 78*. 



4 INTRODUCTION 

bly abbreviating the transition from the medieval to the 
modern mode of production." Such was protection at 
its origin in the seventeenth century, such it remained 
well into the nineteenth century. It was then held to be 
the normal policy of every civilized state in western Eu- 
rope. The only exceptions were the smaller states of 
Germany and Switzerland — not from dislike of the sys- 
tem, but from the impossibility of applying it to such 
small territories. 

It was under the fostering wing of protection that 
the system of modern industry — production by steam- 
moved machinery — was hatched and developed in Eng- 
land during the last third of the eighteenth century. 
And, as if tariff-protection were not sufficient, the wars 
against the French Revolution helped to secure to Eng- 
land the monopoly of the new industrial methods. For 
more than twenty years English men-of-war cut off the 
industrial rivals of England from their respective colonial 
markets, while they forcibly opened these markets to 
English commerce. The secession of the South Ameri- 
can colonies from the rule of their European mother- 
countries, the conquest by England of all French and 
Dutch colonies worth having, the progressive subjuga- 
tion of India, turned the people of all these immense ter- 
ritories into customers for English goods. England thus 
supplemented the protection she practised at home, by the 
free trade she forced upon her possible customers 
abroad; and, thanks to this happy mixture of both sys- 
tems, at the end of the wars, in 1815, she found herself, 
with regard to all important branches of industry in pos- 
session of the virtual monopoly of the trade of the world. 

This monopoly was further extended and strengthened 
during the ensuing years of peace. The start which Eng- 
land had obtained during the war, was increased from 



INTRODUCTION 5 

year to year; she seemed to distance more and more all 
her possible rivals. The exports of manufactured goods 
in ever growing quantities became indeed a question of 
life and death to that country. And there seemed but 
two obstacles in the way: the prohibitive or protective 
legislation of other countries, and the taxes upon the 
import of raw materials and articles of food in England. 

Then the free trade doctrines of classical political 
economy — of the French physiocrats and their English 
successors, Adam Smith and Ricardo — ^became popular 
in the land of John Bull. Protection at home was need- 
less to manufacturers who beat all their foreign rivals, 
and whose very existence was staked on the expansion of 
their exports. Protection at home was of advantage to 
none but the producers of articles of food and other raw 
materials, to the agricultural interest, which, under then 
existing circumstances in England, meant the receivers 
of rent, the landed aristocracy. And this kind of pro- 
tection was hurtful to the manufacturers. By taxing 
raw materials it raised the price of the articles manu- 
factured from them ; by taxing food, it raised the price of 
labor; in both ways, it placed the British manufacturer 
at a disadvantage as compared with his foreign compet- 
itor. And, as all other countries sent to England chiefly 
agricultural products, and drew from England chiefly 
manufactured goods, repeal of the English protective 
duties on corn and raw materials generally was at the 
same time an appeal to foreign countries, to do away 
with, or at least, to reduce, in return, the import duties 
levied by them on English manufacturers. 

After a long and violent struggle, the English indus- 
trial capitalists, already in reality the leading class of 
the nation, that class whose interests were then the chief 
national interests, were victorious. The landed aris- 



6 INTRODUCTION 

tocracy had to give in. The duties on corn and other 
raw materials were repealed. Free trade became the 
watchword of the day. To convert all other countries 
to the gospel of free trade, and thus to create a world 
in which England was the great manufacturing center, 
with all other countries for its dependent agricultural dis- 
tricts, that was the next task before the English manu- 
facturers and their mouthpieces, the political economists. 
That was the time of the Brussels Congress, the time 
when Marx prepared the speech in question. While 
recognizing that protection may still, under certain cir- 
stances, for instance, in the Germany of 1847, be of 
advantage to the manufacturing capitalists ; while proving 
that free trade was not the panacea for all the evils 
under which the working class suffered, and might even 
aggravate them; he pronounces, ultimately and on prin- 
ciple, in favor of free trade. To him, free trade is 
the normal condition of modern capitalist production. 
Only under free trade can the immense productive 
powers of steam, of electricity, of machinery, be fully 
developed ; and the quicker the pace of this development, 
the sooner and the more fully will be realized its inevitable 
results ; society splits up into two classes, capitalists here, 
wage-laborers there; hereditary wealth on one side, he- 
reditary poverty on the other; supply outstripping de- 
mand, the markets being unable to absorb the ever grow- 
ing mass of the productions of industry ; an ever recurring 
cycle of prosperity, glut, crisis, panic, chronic depression 
and gradual revival of trade, the harbinger not of perma- 
nent improvement but of renewed over-production and 
crisis; in short, productive forces expanding to such a 
degree that they rebel, as against unbearable fetters, 
against the social institutions under which they are put 
in motion ; the only possible solution : a social revolution, 



INTRODUCTION 7 

freeing the social productive forces from the fetters of 
an antiquated social order, and the actual producers, the 
great mass of the people, from wage-slavery. And because 
free trade is the natural, the normal atmosphere for this 
historical evolution, the economic medium in which the 
conditions for the inevitable social revolution will be the 
soonest created — for this reason, and for this alone, did 
Marx declare in favor of free trade. 

Anyhow, the years immediately following the victory 
of free trade in England seemed to verify the most ex- 
travagant expectations of prosperity founded upon that 
event. British commerce rose to a fabulous amount; 
the industrial monopoly of England on the market of 
the world seemed more firmly established than ever ; new 
iron works, new textile factories, arose by wholesale ; new 
branches of industry grew up on every side. There 
was, indeed, a severe crisis in 1857, but that was over- 
come, and the onward movement in trade and manufac- 
tures was soon again in full swing, until in 1866 a fresh 
panic occurred, a panic, this time, which seems to mark 
a new departure in the economic history of the world. 

The unparalleled expansion of British manufactures 
and commerce between 1848 and 1866 was no doubt 
due, to a great extent, to the removal of the protective 
duties on food and raw materials. But not entirely. 
Other important changes took place simultaneously and 
helped it on. The above years comprise the discovery 
and working of the Californian and Australian gold fields 
which increased so immensely the circulating medium of 
the world ; they mark the final victory of steam over all 
other means of transport; on the ocean, steamers now 
superseded sailing vessels ; on land in all civilized coun- 
tries, the railroad took the first place, the macadamized 
road the second ; transport now became four times quicker 



8 INTRODUCTION 

and four times cheaper. No wonder that under such fa- 
vorable circumstances British manufactures worked by 
steam should extend their sway at the expense of foreign 
domestic industries based upon manual labor. But were 
the other countries to sit still and to submit in humility 
to this change, which degraded them to be mere agricul- 
tural appendages of England, the "workshop of the 
world"? 

The foreign countries did nothing of the kind. 
France, for nearly two hundred years, had screened her 
manufactures behind a perfect Chinese wall of protec- 
tion and prohibition, and had attained in all articles of 
luxury and of taste a supremacy which England did not 
even pretend to dispute. Switzerland, under perfect free 
trade, possessed relatively important manufactures which 
English competition could not touch. Germany, with a 
tariff far more liberal than that of any other large con- 
tinental country, was developing its manufactures at a rate 
relatively more rapid than even England. And America, 
who was, by the civil war of 1861, all at once thrown 
upon her own resources, had to find means to meet a sud- 
den demand for manufactured goods of all sorts, and 
could only do so by creating manufactures of her own at 
home. The war demand ceased with the war; but the 
new manufactures were there, and had to meet British 
competition. And the war had ripened, in America, the 
insight that a nation of thirty-five millions doubling its 
numbers in forty years at most, with such immense re- 
sources, and surrounded by neighbors that must be for 
years to come chiefly agriculturalists, that such a nation 
had the "manifest destiny" to be independent of foreign 
manufactures for its chief articles of consumption, and 
to be so in time of peace as well as in time of war. And 
then America turned protectionist, 



INTRODUCTION 9 

It may now be fifteen years ago, I traveled in a rail- 
way carriage with an intelligent Glasgow merchant, in- 
terested, probably, in the iron trade. Talking about 
America, he treated me to the old free trade lucubra- 
tions: ''Was it not inconceivable that a nation of sharp 
business men like the Americans should pay tribute to 
indigenous iron masters and manufacturers, when they 
could buy the same, if not a better article, ever so much 
cheaper in this country?" And then he gave me ex- 
amples as to how much the Americans taxed themselves 
in order to enrich a few greedy iron masters. "Well," 
I replied, "I think there is another side to the question. 
You know that in coal, water-power, iron and other ores, 
cheap food, home-grown cotton and other raw materials, 
America has resources and advantages unequaled by any 
European country; and that these resources cannot be 
fully developed except by America becoming a manufac- 
turing country. You will admit, too, that nowadays a 
great nation like the Americans cannot exist on agricul- 
ture alone ; that that would be tantamount to a condem- 
nation to permanent barbarism and inferiority ; no great 
nation can live, in our age, without manufactures of her 
own. Well, then, if America must become a manufac- 
turing country, and if she has every chance of not only 
succeeding, but even outstripping her rivals, there are 
two ways open to her : either to carry on, for, let us say, 
fifty years, under free trade an extremely expensive 
competitive war against English manufacturers that have 
got nearly a hundred years' start ; or else to shut out, by 
protective duties, English manufacturers for, say, twen- 
ty-five years, with the almost absolute certainty that at 
the end of the twenty-five years she will be able to hold 
her own in the open market of the world. Which of the 
two will be the cheapest and the shortest ? That is the ques- 



lo INTRODUCTION 

tion. If you want to go from Glasgow to London, you 
can take the parliamentary train at a penny a mile and 
travel at the rate of twelve miles an hour. But you do 
not ; your time is too valuable, you take the express, pay 
twopence a mile and do forty miles an hour. Very well, 
the Americans prefer to pay express fare and to go ex- 
press speed." My Scotch free trader had not a word 
in reply. 

Protection, being a means of artificially manufacturing 
manufacturers, may, therefore, appear useful not only 
to an incompletely developed capitalist class still strug- 
gling with feudalism; it may also give a lift to the ris- 
ing capitalist class of a country which, like America, has 
never known feudalism, but which has arrived at that 
stage of development where the passage from agricul- 
ture to manufactures becomes a necessity. America, 
placed in that situation, decided in favor of protection. 
Since that decision was carried out, the five and twenty 
years of which I spoke to my fellow-traveler have about 
passed, and, if I was not wrong, protection ought to have 
done its task for America, and ought to be now becom- 
ing a nuisance. 

That has been my opinion for some time. Nearly two 
years ago, I said to an American protectionist : "I am con- 
vinced that if America goes in for free trade she will 
in ten years have beaten England in the market of the 
world." 

Protection is at best an endless screw, and you never 
know when you have done with it. By protecting one 
industry, you directly or indirectly hurt all others, and 
have therefore to protect them, too. By so doing you 
again damage the industry that you first protected, and 
have to compensate it; but this compensation reacts, as 
before, on all other trades, and entitles them to redress, 



INTRODUCTION " 

and so on ad infinitum. America, in this respect, offers us 
a striking example of the best way to kill an important 
industry by protection. In 1856, the total imports and 
exports by sea of the United States amounted to $641,- 
604,850. Of this amount, 75.2 per cent, were carried in 
American, and only 24.8 per cent, in foreign vessels. 
British ocean-steamers were already then encroaching 
upon American sailing vessels; yet, in i860, of a total 
sea-going trade of $762,288,550, American vessels still 
carried 66.5 per cent. The civil war came on, and pro- 
tection to American shipbuilding; and the latter plan 
was so successful that it has nearly completely driven the 
American flag from the high seas. In 1887 the total sea- 
going trade of the United States amounted to $1,408,502,- 
979; but of this total only 13.80 per cent, were carried in 
American, and 86.20 per cent, in foreign bottoms. The 
goods carried by American ships amounted, in 1856, to 
$482,268,275 ; in i860 to $507,274,757. In 1887 they had 
sunk to $194,356,746.^ Forty years ago, the American 
flag was the most dangerous rival of the British flag, 
and bade fair to outstrip it on the ocean ; now it is no- 
where. Protection to shipbuilding has killed both ship- 
ping and shipbuilding. 

Another point. Improvements in the methods of pro- 
duction nowadays follow each other so rapidly, and 
change the character of entire branches of industry so 
suddenly and so completely, that what may have been 
yesterday a fairly balanced protective tariff is no longer 
so to-day. Let us take another example from the Report 
of the Secretary of the Treasury for 1887 : 

''Improvement in recent years in the machinery em- 
ployed in combing wool has so changed the character of 

1 Annual Report of the Secretary of the Treasury, etc for the year 1887. Wash- 
ington : 1887 ; pp. xxviii, xxix. 



12 INTRODUCTION 

what are commercially known as worsted cloths that the 
latter have largely superseded woollen cloths for use as 
men's wearing apparel. This change . . . has 
operated to the serious injury of our domestic manufac- 
turers of these (worsted) goods, because the duty on the 
wool which they must use is the same as that upon wool 
used in making woollen cloths, while the rates of duty 
imposed upon the latter when valued at not ex- 
ceeding 80 cents per pound are 35 cents per pound 
and 35 per cent, ad valorem, whereas the duty on 
worsted cloths valued at not exceeding 80 cents ranges 
from 10 to 24 cents per pound and 35 per cent, ad 
valorem. In some cases the duty on the wool used 
in making worsted cloths exceeds the duty imposed on the 
finished article f' Thus what was protection to the home 
industry yesterday, turns out to-day to be a premium 
to the foreign importer ; and well may the Secretary of the 
Treasury say : "There is much reason to believe that the 
manufacture of worsted cloths must soon cease in this 
country unless the tariff law in this regard is amended" 
(p. xix). But to amend it, you will have to fight the 
manufacturers of woollen cloths who profit by this state 
of things; you will have to open a regular campaign to 
bring the majority of both Houses of Congress, and 
eventually the public opinion of the country, round to 
your views, and the question is, Will that pay? 

But the worst of protection is, that when you once 
have got it you cannot easily get rid of it. Difficult as 
is the process of adjustment of an equitable tariff, the 
return to free trade is immensely more difficult. The 
circumstances which permitted England to accomplish 
the change in a few years, v/ill not occur again. And 
even there the struggle dated from 1823 (Huskisson), 
commenced to be successful in 1842 (Peel's tariff), and 



INTRODUCTION 13 

was continued for several years after the repeal of the 
Corn Laws. Thus protection to the silk manufacture 
(the only one which had still to fear foreign competition) 
was prolonged for a series of years and then granted in 
another, positively infamous form; while the other tex- 
tile industries were subjected to the Factory Act, which 
limited the hours of labor of women, young persons and 
children, the silk trade was favored with considerable 
exceptions to the general rule, enabling them to work 
younger children, and to work the children and young 
persons longer hours, than the other textile trades. The 
monopoly that the hypocritical free traders repealed 
with regard to the foreign competitors, that monopoly 
they created anew at the expense of the health and lives 
of English children. 

But no country will again be able to pass from protec- 
tion to free trade at a time when all, or nearly all 
branches of its manufactures can defy foreign competi- 
tion in the open market. The necessity of the change 
will come long before such a happy state may be even 
hoped for. That necessity will make itself evident in 
different trades at different times; and from the con- 
flicting interests of these trades, the most edifying 
squabbles, lobby intrigues, and parliamentary conspiracies 
will arise. The machinist, engineer, and shipbuilder may 
find that the protection granted to the iron master raises 
the price of his goods so much that his export trade is 
thereby, and thereby alone, prevented; the cotton-cloth 
manufacturer might see his way to driving English cloth 
out of the Chinese and Indian markets, but for the high 
price he has to pay for the yarn, on account of protection 
to spinners ; and so forth. The moment a branch of na- 
tional industry has completely conquered the home mar- 
ket, that moment exportation becomes a necessity to it. 



14 INTRODUCTION 

Under capitalist conditions, an industry either expands 
or wanes. A trade cannot remain stationary; stoppage 
of expansion is incipient ruin ; the progress of mechanical 
and chemical invention, by constantly superseding hu- 
man labor, and ever more rapidly increasing and concen- 
trating capital, creates in every stagnant industry a glut 
both of workers and of capital, a glut which finds no 
vent anywhere, because the same process is taking place 
in all other industries. Thus the passage from a home 
to an export trade becomes a question of life and death 
for the industries concerned ; but they are met by the es- 
tablished rights, the vested interests of others who as 
yet find protection either safer or more profitable than 
free trade. Then ensues a long and obstinate fight be- 
tween free traders and protectionists; a fight where, 
on both sides, the leadership soon passes out of the hands 
of the people directly interested into those of professional 
politicians, the wire-pullers of the traditional political 
parties, whose interest is, not a settlement of the ques- 
tion, but its being kept open forever; and the result of 
an immense loss of time, energy, and money is a series of 
compromises, favoring now one, now the other side, and 
drifting slowly though not majestically in the direction 
of free trade — unless protection manages, in the mean- 
time, to make itself utterly insupportable to the nation, 
which is just now likely to be the case in America. 

There is, however, another kind of protection, the 
worst of all, and that is exhibited in Germany. Ger- 
many, too, began to feel, soon after 1815, the necessity 
of a quicker development of her manufactures. But the 
first condition of that was the creation of a home mar- 
ket by the removal of the innumerable customs lines and 
varieties of fiscal legislation formed by the small Ger- 
man states, in other words, the formation of a German 



INTRODUCTION iS 

Customs Union or Zollverein. That could only be done 
on the basis of a liberal tariff, calculated rather to raise 
a common revenue than to protect home production. On 
no other condition could the small states have been in- 
duced to join. Thus the new German tariff, though 
slightly protective to some trades, was at the time of its 
introduction a model of free trade legislation; and it 
remained so, although, ever since 1830, the majority of 
German manufacturers kept clamoring for protection. 
Yet, under this extremely liberal tariff, and in spite of 
German household industries based on hand-labor being 
mercilessly crushed out by the competition of English fac- 
tories worked by steam, the transition from manual labor 
to machinery was gradually accomplished in Germany too, 
and is now nearly complete; the transformation of Ger- 
many from an agricultural to a manufacturing country 
went on at the same pace, and was, since 1866, assisted 
by favorable political events: the establishment of a 
strong central government, and federal legislature, in- 
suring uniformity in the laws regulating trade, as well 
as in currency, weights and measures, and, finally, the 
flood of the French milliards. Thus, about 1874, Ger- 
man trade on the market of the world ranked next to 
that of Great Britain,^ and Germany employed more 
steam power in manufactures and locomotion than any 
European Continental country. The proof has thus been 
furnished that even nowadays, in spite of the enormous 
start that English industry has got, a large country can 
work its way up to successful competition, in the open 
market, with England. 

Then, all at once, a change of front was made: Ger- 

» General Trade of Exports and Imports added in 1874, in millions of dollars : Great 
Britain — 3300 ; Germany — 2325; France — 1665; United States — 1245 millions of 
dollars. (Kolb, Statistik, 7th edit. Leipsic : 1875 ; p. 790.) 



1 6 INTRODUCTION 

many turned protectionist, at a moment when more than 
ever free trade seemed a necessity for her. The change 
was no doubt absurd; but it may be explained. While 
Germany had been a corn-exporting country, the whole 
agricultural interest, not less than the whole shipping 
trade, had been ardent free traders. But in 1874, in- 
stead of exporting, Germany required large supplies of 
corn from abroad. About that time, America began to 
flood Europe with enormous supplies of cheap corn; 
wherever they went, they brought down the money reve- 
nue yielded by the land, and consequently its rent; and 
from that moment, the agricultural interest, all over 
Europe, began to clamor for protection. At the same 
time, manufacturers in Germany were suffering from the 
effect of the reckless overtrading brought on by the 
influx of the French milliards, while England, whose 
trade, ever since the crisis of 1866, had been in a state 
of chronic depression, inundated all accessible markets 
with goods unsalable at home and offered abroad at 
ruinously low prices. Thus it happened that German 
manufacturers, though depending, above all, upon ex- 
port, began to see in protection a means of securing to 
themselves the exclusive supply of the home market. 
And the government, entirely in the hands of the landed 
aristocracy and squirearchy, was only too glad to profit 
by this circumstance, in order to benefit the receivers of 
the rent of land, by offering protective duties to both 
landlords and manufacturers. In 1878, a highly protec- 
tive tariff was enacted both for agricultural products and 
for manufactured goods. 

The consequence was that henceforth the exportation 
of German manufactures was carried on at the direct 
cost of the home consumers. Wherever possible, "rings" 
or " trusts were formed to regulate the export trade and 



INTRODUCTION ^7 

even production itself. The German iron trade is in 
the hands of a few large firms, mostly joint stock com- 
panies, who, betwixt them, can produce about four times 
as much iron as the average consumption of the country 
can absorb. To avoid unnecessary competition with one 
another, these firms have formed a trust which divides 
amongst them all foreign contracts, and determines in 
each case the firm that is to make the real tender. This 
''trust," some years ago, had even come to an agreement 
with the English iron masters, but this no longer sub- 
sists. Similarly, the Westphalian coal mines (producing 
about thirty million tons annually) had formed a trust 
to regulate production, tenders for contracts, and prices. 
And, altogether, any German manufacturer will tell you 
that the only thing the protective duties do for him is to 
enable him to recoup himself in the home market for 
the ruinous prices he has to take abroad. And this is 
not all. This absurd system of protection to manufac- 
turers is nothing but the sop thrown to industrial capi- 
talists to induce them to support a still more outrageous 
monopoly given to the landed interest. Not only is all 
agricultural produce subjected to heavy import duties 
which are increased from year to year, but certain rural 
industries, carried on on large estates for account of 
the proprietor, are positively endowed out of the public 
purse. The beet-root sugar manufacture is not only pro- 
tected, but receives enormous sums in the shape of export 
premiums. One who ought to know is of opinion that if 
the exported sugar were all thrown into the sea, the man- 
ufacturer would still clear a profit out of the govern- 
ment premium. Similarly, the potato-spirit distilleries 
receive, in consequence of recent legislation, a present, out 
of the pockets of the public, of about nine million dol- 
lars a year. And as almost every large landowner in 



I 8 INTRODUCTION 

northeastern Germany is either a beet-root sugar man- 
ufacturer or a potato-spirit distiller, or both, no wondei: 
the world is literally deluged with their productions. 

This policy, ruinous under any circumstances, is 
doubly so in a country whose manufactures keep up their 
standing in neutral markets chiefly through the cheap- 
ness of labor. Wages in Germany, kept near starva- 
tion point at the best of times, through redundancy of 
population (which increases rapidly, in spite of emigra- 
tion), must rise in consequence of the rise in all neces- 
saries caused by protection; the German manufacturer 
will, then, no longer be able, as he too often is now, to 
make up for a ruinous price of his articles by a deduc- 
tion from the normal wages of his hands, and will be 
driven out of the market. Protection, in Germany, is 
killing the goose that lays the golden eggs. 

France, too, suffers from the consequences of protec- 
tion. The system in that country has become, by its 
two centuries of undisputed sway, almost part and parcel 
of the life of the nation. Nevertheless, it is more and 
more becoming an obstacle. Constant changes in the 
methods of manufacture are the order of the day; but 
protection bars the road. Silk velvets have their backs 
nowadays made of fine cotton thread; the French manu- 
facturer has either to pay protection price for that, or to 
submit to such interminable official chicanery as fully 
makes up for the difference between that price and the 
government drawback on exportation; and so the velvet 
trade goes from Lyons to Crefeld, where the protection 
price for fine cotton thread is considerably lower. 
French exports, as said before, consist chiefly of articles 
of luxury, where French taste cannot, as yet, be beaten ; 
but the chief consumers, all over the world, of such arti- 
cles are our modern upstart capitalists, who have no edu- 



INTRODUCTION 19 

cation and no taste, and who are suited quite as well by 
cheap and clumsy German or English imitations, and 
often have these foisted upon them for the real French 
article at more than fancy prices. The market for those 
specialties which cannot be made out of France is con- 
stantly getting narrower, French exports of manufac- 
tures are barely kept up, and must soon decline ; by what 
new articles can France replace those whose export is 
dying out ? If anything can help here, it is a bold meas- 
ure of free trade, taking the French manufacturer out 
of his accustomed hot-house atmosphere and placing him 
once more in the open air of competition with foreign 
rivals. Indeed, French general trade would have long 
since begun shrinking, were it not for the slight and 
vacillating step in the direction of free trade made by 
the Cobden treaty of i860; but that has well-nigh ex- 
hausted itself and a stronger dose of the same tonic is 
wanted. 

It is hardly worth while to speak of Russia. There, the 
protective tariff — the duties having to be paid in gold, in- 
stead of in the depreciated paper currency of the country 
— serves above all things to supply the pauper govern- 
ment with the hard cash indispensable for transactions 
with foreign creditors; on the very day on which that 
tariff fulfils its protective mission by totally excluding 
foreign goods, on that day the Russian government is 
bankrupt. And yet that same government amuses its 
subjects by dangling before their eyes the prospect of 
making Russia, by means of this tariff, an entirely self- 
supplying country, requiring from the foreigner neither 
food, nor raw material, nor manufactured articles, nor 
works of art. The people who believe in this vision of a 
Russian Empire, secluded and isolated from the rest of 
the world, are on a level with the patriotic Prussian lieu- 



20 INTRODUCTION • 

tenant who went into a shop and asked for a globe, not 
a terrestrial or a celestial one, but a globe of Prussia. 

To return to America. There are plenty of symp- 
toms that protection has done all it can for the United 
States, and that the sooner it receives notice to quit, the 
better for all parties. One of these symptoms is the for- 
mation of "rings" and "trusts" within the protected in- 
dustries for the more thorough exploitation of the 
monopoly granted to them. Now, "rings" and "trusts" 
are truly American institutions, and, where they exploit 
natural advantages, they are generally, though grum- 
blingly, submitted to. The transformation of the Penn- 
sylvanian oil supply into a monopoly by the Standard 
Oil Company is a proceeding entirely in keeping with 
the rules of capitalist production. But if the sugar re- 
finers attempt to transform the protection granted them, 
by the nation, against foreign competition, into a mo- 
nopoly against the home consumer, that is to say, against 
the same nation that granted the protection, that is quite 
a different thing. Yet the large sugar refiners have 
formed a "trust" which aims at nothing else. And the 
sugar trust is not the only one of its kind. Now, the 
formation of such trusts in protected industries is the 
surest sign that protection has done its work, and is 
changing its character; that it protects the manufacturer 
no longer against the foreign importer, but against the 
home consumer; that it has manufactured, at least in 
the special branch concerned, quite enough, if not too 
many manufacturers; that the money it puts into the 
purse of these manufacturers is money thrown away, ex- 
actly as in Germany. 

In America, as elsewhere, protection is bolstered up 
by the argument that free trade will only benefit Eng- 
land. The best proof to the contrary is that in England 



INTRODUCTION 2i 

not only the agriculturalists and landlords but even the 
manufacturers are turning protectionists. In the home 
of the ''Manchester school" of free traders, on Novem- 
ber I, 1886, the Manchester chamber of commerce dis- 
cussed a resolution *'that, having waited in vain forty 
years for other nations to follow the free trade example 
of England, the chamber thinks the time has arrived to 
reconsider that position." The resolution was indeed re- 
jected, but by 22 votes against 21 ! And that happened 
in the centre of the cotton manufacture, i. e., the only 
branch of English manufacture whose superiority in the 
open market seems still undisputed! But, then, even 
in that special branch inventive genius has passed from 
England to America. The latest improvements in ma- 
chinery for spinning and weaving cotton have come, al- 
most all, from America, and Manchester has to adopt 
them. In industrial inventions of all kinds, America has 
distinctly taken the lead, while Germany runs England 
very close for second place. The consciousness is gain- 
ing ground in England that that country's industrial 
monopoly is irretrievably lost, that she is still relatively 
losing ground, while her rivals are making progress, and 
that she is drifting into a position where she will have 
to be content with being one manufacturing nation among 
many, instead of, as she once dreamt, "the workshop of 
the world." It is to stave off this impending fate that 
protection, scarcely disguised under the veil of "fair 
trade" and retaliatory tariffs, is now invoked with such 
fervor by the sons of the very men who, forty years ago, 
knew no salvation but in free trade. And when Eng- 
lish manufacturers begin to find that free trade is ruin- 
ing them, and ask the government to protect them against 
their foreign competitors, then, surely, the moment has 
come for these competitors to retaliate by throwing over- 



2 2 INTRODUCTION 

board a protective system henceforth useless, to fight the 
fading industrial monopoly of England with its own 
weapon, free trade. 

But, as I said before, you may easily introduce pro- 
tection, but you cannot get rid of it again so easily. 
The legislature, by adopting the protective plan, has 
created vast interests, for which it is responsible. And 
not every one of these interests — the various branches of 
industry — is equally ready, at a given moment, to face 
open competition. Some will be lagging behind, while 
others have no longer need of protective nursing. This 
difference of position will give rise to the usual lobby- 
plotting, and is in itself a sure guarantee that the pro- 
tected industries, if free trade is resolved upon, will 
be let down very easy indeed, as was the silk manufac- 
ture in England after 1846. That is unavoidable under 
present circumstances, and will have to be submitted 
to by the free trade party so long as the change is re- 
solved upon in principle. 

The question of free trade or protection moves en- 
tirely within the bounds of the present system of capi- 
talist production, and has, therefore, no direct interest 
for us socialists, who want to do away with that sys- 
tem. Indirectly, however, it interests us, inasmuch as 
we must desire the present system of production to de- 
velop and expand as freely and as quickly as possible; 
because along with it will develop also those economic 
phenomena which are its necessary consequences, and 
which must destroy the whole system, misery of the great 
mass of the people, in consequence of overproduction; 
this overproduction engendering either periodical gluts 
and revulsions, accompanied by panic, or else a chronic 
stagnation of trade ; division of society into a small class 
of large capitalists, and a large one of practically hered- 



INTRODUCTION 23 

itary wage-slaves, proletarians, who, while their num- 
bers increase constantly, are at the same time constantly 
being superseded by new labor-saving machinery; in 
short, society brought to a deadlock, out of which there is 
no escaping but by a complete remodeling of the eco- 
nomic structure which forms its basis. From this point 
of view, forty years ago, Marx pronounced, in principle, 
in favor of free trade as the more progressive plan, and, 
therefore, the plan which would soonest bring capitalist 
society to that deadlock. But if Marx declared in favor 
of free trade on that ground, is that not a reason for 
every supporter of the present order of society to declare 
against free trade? If free trade is stated to be revo- 
lutionary, must not all good citizens vote for protection 
as a conservative plan? 

If a country nowadays accept free trade, it will 
certainly not do so to please the socialists. It will do 
so because free trade has become a necessity for the in- 
dustrial capitalists. But if it should reject free trade, 
and stick to protection, in order to cheat the socialists 
out of the expected social catastrophe, that will not hurt 
the prospects of socialism in the least. Protection is a 
plan for artificially manufacturing manufacturers, and 
therefore also a plan for artificially manufacturing wage- 
laborers. You cannot breed the one without breeding 
the other. The wage-laborer everywhere follows in the 
footsteps of the manufacturer; he is like the "gloomy 
care" of Horace, that sits behind the rider, and that he 
cannot shake off wherever he goes. You cannot escape 
fate ; in other words, you cannot escape the necessary con- 
sequences of your own actions. A system of production 
based upon the exploitation of wage-labor, in which 
wealth increases in proportion to the number of laborers 
employed and exploited, such a system is bound to in- 



24 INTRODUCTION 

crease the class of wage-laborers, that is to say, the class 
which is fated one day to destroy the system itself. In 
the meantime, there is no help for it; you must go on 
developing the capitalist system, you must accelerate the 
production, accumulation, and centralization of capital- 
ist wealth, and, along with it, the production of a revolu- 
tionary class of laborers. Whether you try the protec- 
tionist or the free trade plan will make no difference 
in the end, and hardly any in the length of the respite 
left to you until the day when that end will come. For 
long before that day will protection have become an un- 
bearable shackle to any country aspiring, with a chance 
of success, to hold its own in the world market. 

Frederick Engels. 



FREE TRADE 



Gentlemen : The Repeal of the Corn Laws in Eng- 
land is the greatest triumph of free trade in the nine- 
teenth century. In every country where manufacturers 
discuss free trade, they have in mind chiefly free trade 
in corn or raw material generally. To burden foreign 
corn with protective duties is infamous, it is to speculate 
on the hunger of the people. 

Cheap food, high wages, for this alone the English 
free traders have spent millions, and their enthusiasm 
has already infected their continental brethren. And, 
generally speaking, all those who advocate free trade do 
so in the interests of the working class. 

But, strange to say, the people for whom cheap food is 
to be procured at all costs are very ungrateful. Cheap 
food is as ill reputed in England as is cheap govern- 
ment in France. The people see in these self-sacrificing 
gentlemen, in Bowring, Bright & Co., their worst enemies 
and the most shameless hypocrites. 

Every one knows that in England the struggle between 
Liberals and Democrats takes the name of the struggle 
between Free Traders and Chartists. Let us see how 
the English free traders have proved to the people the 
good Intentions that animate them. 

This is what they said to the factory hands : 

'The duty on corn is a tax upon wages; this tax 



26 FREE TRADE 

you pay to the landlords, those medieval aristocrats; 
if your position is a wretched one, it is only on ac- 
count of the high price of the most indispensable 
articles of food." 

The workers in turn asked of the manufacturers : 

"How is it that in the course of the last thirty years, 
while our commerce and manufacture has immensely in- 
creased, our wages have fallen far more rapidly, in pro- 
portion, than the price of corn has gone up? 

"The tax which you say we pay the landlords is about 
three pence a week per worker. And yet the wages of 
the hand-loom weaver fell, between 1815 and 1843, from 
28s. per week to 5s., and the wages of the power-loom 
weavers, between 1823 and 1843, from 20s. per week to 
8s. And during the whole of the time that portion of 
the tax which you say we pay the landlord has never ex- 
ceeded three pence. And, then, in the year 1834, when 
bread was very cheap and business lively, what did you 
tell us? You said, 'If you are poor, it is only because 
you have too many children, and your marriages are 
more productive than your labor !' 

"These are the very words you spoke to us, and you 
set about making new Poor Laws, and building work- 
houses, those Bastilles of the proletariat." 

To this the manufacturers replied: 

"You are right, worthy laborers ; it is not the price of 
corn alone, but competition of the hands among them- 
selves as well, which determines wages. But just bear in 
mind the circumstance that our soil consists of rocks and 
sandbanks only. You surely do not imagine that corn 
can be grown in flower-pots ! If, instead of wasting our 
labor and capital upon a thoroughly sterile soil, we were 
to give up agriculture, and devote ourselves exclusively 
to commerce and manufacture, all Europe would abandon 



FREE TRADE 27 

its factories, and England would form one huge factory- 
town, with the whole of the rest of Europe for its agri- 
cultural districts." 

While thus haranguing his own workingmen, the man- 
ufacturer is interrogated by the small tradesmen, who 
exclaim : 

"If we repeal the Corn Laws, we shall indeed ruin 
agriculture; but, for all that, we shall not compel other 
nations to give up their own factories, and buy our goods. 
What will the consequences be? I lose my customers in 
the country, and the home market is destroyed." 

The manufacturer turns his back upon the working- 
men and replies to the shopkeeper : 

"As to that, you leave it to us ! Once rid of the duty 
on corn, we shall import cheaper corn from abroad. 
Then we shall reduce wages at the very time when 
they are rising in the countries where we get our corn. 
Thus in addition to the advantages which we already 
enjoy we shall have lower wages and, with all these 
advantages, we shall easily force the Continent to buy 
of us." 

But now the farmers and agricultural laborers join in 
the discussion. 

"And what, pray, is to become of us ? Are we to help 
in passing a sentence of death upon agriculture, when we 
get our living by it ? Are we to let the soil be torn from 
beneath our feet?" 

For all answer the Anti-Corn Law League contented 
itself with offering prizes for the three best essays upon 
the wholesome influence of the repeal of the Corn Laws 
on English agriculture. 

These prizes were carried off by Messrs. Hope, Morse, 
and Greg, whose essays were distributed broadcast 
throughout the agricultural districts. One of the priz€ 



28 FREE TRADE 

essayists devotes himself to proving that neither the ten- 
ant farmer nor the agricultural laborer would lose by 
the repeal of the Corn Laws, and that the landlord alone 
would lose. 

"The English tenant farmer," he exclaims, "need not 
fear repeal, because no other country can produce such 
good corn so cheaply as England. Thus, even if the 
price of corn fell, it would not hurt you, because this fall 
would only affect rent, which would go down, while the 
profit of capital and the wages of labor would remain 
stationary." 

The second prize essayist, Mr. Morse, maintains, on 
the contrary, that the price of corn will rise in conse- 
quence of repeal. He is at infinite pains to prove that 
protective duties have never been able to secure a re- 
munerative price for corn. 

In support of his assertion he quotes the fact that, 
wherever foreign corn has been imported, the price of 
corn in England has gone up considerably, and that 
when no corn has been imported the price has fallen ex- 
tremely. This prize-winner forgets that the importation 
was not the cause of the high price, but that the high 
price was the cause of the importation. In direct contra- 
diction of his colleague he asserts that every rise in the 
price of corn is profitable to both the tenant farmer and 
laborer, but does not benefit the landlord. 

The third prize essayist, Mr. Greg, who is a large manu- 
facturer and whose work is addressed to the large tenant 
farmers, could not afford to echo such silly stuff. His 
language is more scientific. He admits that the Corn 
Laws can increase rent only by increasing the price of 
corn, and that they can raise the price of corn only by 
inducing the investment of capital upon land of inferior 
quality, and this is explained quite simply. 



FREE TRADE 29 

In proportion as population increases, it inevitably fol- 
lows, if foreign corn cannot be imported, that less fruitful 
soil must be placed under cultivation. This involves 
more expense and the product of this soil is consequently 
dearer. There being a demand for all the corn thus pro- 
duced, it will all be sold. The price for all of it will of 
necessity be determined by the price of the product of the 
inferior soil. The difference between this price and the 
cost of production upon soil of better quality constitutes 
the rent paid for the use of the better soil. If, therefore, 
in consequence of the repeal of the Corn Laws, the price 
of corn falls, and if, as a matter of course, rent falls along 
with it, it is because inferior soil will no longer be culti- 
vated. Thus the reduction of rent must inevitably ruin a 
part of the tenant farmers. 

These remarks were necessary in order to make Mr. 
Greg's language comprehensible. 

"The small farmers," he says, "who cannot support 
themselves by agriculture must take refuge in manufac- 
ture. As to the large tenant farmers, they cannot fail to 
profit by the arrangement: either the landlord will be 
obliged to sell them land very cheap, or leases will be 
made out for very long periods. This will enable tenant 
farmers to invest more capital in their farms, to use agri- 
cultural machinery on a larger scale, and to save manual 
labor, which will, moreover, be cheaper, on account of the 
general fall in wages, the immediate consequence of the 
repeal of the Corn Laws." 

Dr. Bowring conferred upon all these arguments the 
consecration of religion, by exclaiming at a public meet- 
ing, "Jesus Christ is Free Trade, and Free Trade is 
Jesus Christ." 

It will be evident that all this cant was not calculated 
to make cheap bread attractive to workingmen. 



30 FREE TRADE 

Besides, how should the workingmen understand the 
sudden philanthropy of the manufacturers, the very men 
still busy fighting against the Ten-Hours Bill, which 
was to reduce the working day of the mill hands from 
twelve hours to ten ? 

To give you an idea of the philanthropy of these man- 
ufacturers I would remind you of the factory regulations 
in force in all their mills. 

Every manufacturer has for his own private use a regu- 
lar penal code by means of which fines are inflicted for 
every voluntary or involuntary offence. For instance, 
the hand pays so much when he has the misfortune to sit 
down on a chair, or whisper, or speak, or laugh ; if he is 
a few moments late ; if any part of a machine breaks, or 
he turns out work of an inferior quality, etc. The fines 
are always greater than the damage really done by the 
workman. And to give the workman every oppor- 
tunity for incurring fines the factory clock is set forward, 
and he is given bad material to make into good stuff. An 
overseer unskilful in multiplying infractions of rules is 
soon discharged. 

You see, gentlemen, this private legislation is enacted 
for the especial purpose of creating such infractions, and 
infractions are manufactured for the purpose of making 
money. Thus the manufacturer uses every means of 
reducing the nominal wage, and even profiting by acci- 
dents over which the workers have no control. And 
these manufacturers are the same philanthropists who 
have tried to persuade the workers that they were capable 
of going to immense expense for the sole and express 
purpose of improving the condition of these same work- 
ingmen! On the one hand they nibble at the workers* 
wages in the pettiest way, by means of factory regula- 
tions, and, on the other, they are prepared to make the 



FREE TRADE 3^ 

greatest sacrifices to raise those wages by means of the 
Anti-Corn Law League. 

They build great palaces, at immense expense, in which 
the league takes up its official residence. They send an 
army of missionaries to all corners of England to preach 
the gospel of free trade; they print and distribute gratis 
thousands of pamphlets to enlighten the workingman 
upon his own interests. They spend enormous sums to 
buy over the press to their side. They organize a vast 
administrative system for the conduct of the free trade 
movement, and bestow all the wealth of their eloquence 
upon public meetings. It was at one of these meetings 
that a workingman cried out: 

"If the landlords were to sell our bones, you manu- 
facturers would be the first to buy them, and to put them 
through the mill and make flour of them." 

The English workingmen have appreciated to the full- 
est extent the significance of the struggle between the 
lords of the land and of capital. They know very well 
that the price of bread was to be reduced in order to re- 
duce wages, and that the profit of capital would rise by 
as much as rent fell. 

Ricardo, the apostle of the English free traders, the 
leading economist of our century, entirely agrees with 
the workers upon this point. In his celebrated work 
upon Political Economy he says : "If instead of growing 
our own corn ... we discover a new market from 
which we can supply ourselves ... at a cheaper 
price, wages will fall and profits rise. The fall in the 
price of agricultural produce reduces the wages, not only 
of the laborer employed in cultivating the soil, but also of 
all those employed in commerce or manufacture." 

Do not believe, gentlemen, that it is a matter of indif- 
ference to the workingman v/hether he receives only four 



32 FREE TRADE 

francs on account of corn being cheaper, when he had 
been receiving five francs before. 

Have not his wages always fallen in comparison with 
profit? And is it not clear that his social position has 
grown worse as compared with that of the capitalist? 
Beside which he loses actually. So long as the price of 
corn was higher and wages were also higher, a small 
saving in the consumption of bread sufficed to procure 
him other enjoyments. But as soon as bread is cheap, 
and wages are therefore low, he can save almost nothing 
on bread for the purchase of other articles. 

The English workingmen have shown the English free 
traders that they are not the dupes of their illusions or 
of their lies; and if, in spite of this, the workers have 
made common cause with the manufacturers against the 
landlords, it is for the purpose of destroying the last 
remnant of feudalism, that henceforth they may have only 
one enemy to deal with. The workers have not miscalcu- 
lated, for the landlords, in order to revenge themselves 
upon the manufacturers, have made common cause with 
the workers to carry the Ten Hours Bill, which the latter 
had been vainly demanding for thirty years, and which 
was passed immediately after the repeal of the Corn 
Laws. 

When Dr. Bowring, at the Congress of Economists, 
drew from his pocket a long list to show how many head 
of cattle, how much ham, bacon, poultry, etc., is im- 
ported into England, to be consumed — as he asserted — ^by 
the workers, he forgot to state that at the same time the 
workers of Manchester and other factory towns were 
thrown out of work by the beginning of the crisis. 

As a matter of principal in political economy, the fig- 
ures of a single year must never be taken as the basis for 
formulating general laws. We must always take the 



FREE TRADE 33 

average of from six to seven years, a period during which 
modern industry passes through the successive phases of 
prosperity, overproduction, crisis, thus completing the in- 
evitable cycle. 

Doubtless, if the price of all commodities falls — and 
this is the necessary consequence of free trade — I can 
buy far more for a franc than before. And the work- 
ingman's franc is as good as any other man's. There- 
fore, free trade must be advantageous to the working- 
man. There is only one little difficulty in this, namely 
that the workman, before he exchanges his franc for 
other commodities, has first exchanged his labor for the 
money of the capitalist. If in this exchange he always 
received the said franc while the price of all other com- 
modities fell, he would always be the gainer by such a 
bargain. The difficulty does not lie in proving that, the 
price of all commodities falling, more commodities can be 
bought for the same sum of money. 

Economists always take the price of labor at the mo- 
ment of its exchange with other commodities, and alto- 
gether ignore the moment at which labor accomplishes 
its own exchange with capital. When it costs less to set 
in motion the machinery which produces commodities, 
then the things necessary for the maintenance of this 
machine, called workman, will also cost less. If all 
commodities are cheaper, labor, which is a commodity too, 
will also fall in price, and we shall see later that this 
commodity, labor, will fall far lower in proportion than 
all other commodities. If the workingman still pins his 
faith to the arguments of the economists, he will find, one 
fine morning, that the franc has dwindled in his pocket, 
and that he has only five sous left. 

Thereupon the economists will tell you : — 

"We admit that competition among the workers will 



34 FREE TRADE 

certainly not be lessened under free trade, and will very 
soon bring wages into harmony with the low price of 
commodities. But, on the other hand, the low price of 
commodities will increase consumption, the larger con- 
sumption will increase production, which will in turn 
necessitate a larger demand for labor, and this larger de- 
mand will be followed by a rise in wages. 

"The whole line of argument amounts to this: Free 
trade increases productive forces. When manufactures 
keep advancing, v/hen wealth, when the productive forces, 
when, in a word, productive capital increases, the demand 
for labor, the price of labor, and consequently the rate 
of wages, rises also." 

The most favorable condition for the workingman is 
the growth of capital. This must be admitted: when 
capital remains stationary, commerce and manufacture 
are not merely stationary but decline, and in this case the 
workman is the first victim. He goes to the wall before 
the capitalist. And in the case of the growth of capital, 
under the circumstances, which, as we have said, are 
the best for the workingman, what will be his lot? He 
will go to the wall just the same. The growth of capital 
implies the accumulation and the concentration of capi- 
tal. This centralization involves a greater division of 
labor and a greater use of machinery. The greater 
division of labor destroys the especial skill of the laborer ; 
and by putting in the place of this skilled work labor 
which any one can perform, it increases competition 
among the workers. 

This competition becomes more fierce as the division 
of labor enables a single man to do the work of three. 
Machinery accomplishes the same result on a much larger 
scale. The accumulation of productive capital forces the 
industrial capitalist to work with constantly increasing 



FREE TRADE 35 

means of production, ruins the small manufacturer, and 
drives him into the proletariat. Then, the rate of interest 
falling in proportion as capital accumulates, the little 
rentiers and retired tradespeople, who can no longer live 
upon their small incomes, are forced to look out for some 
business again and ultimately to swell the number of 
proletarians. Finally, the more productive capital grows, 
the more it is compelled to produce for a market whose 
requirements it does not know — the more supply tries to 
force demand, and consequently crises increase in fre- 
quency and in intensity. But every crisis in turn hastens 
the concentration of capital, adds to the proletariat. 
Thus, as productive capital grows, competition among 
the workers grows too, and grows in a far greater pro- 
portion. The reward of labor is less for all, and the bur- 
den of labor is increased for some at least. 

In 1829 there were, in Manchester, 1088 cotton spin- 
ners employed in 36 factories. In 1841 there were but 448, 
and they tended 53,353 more spindles than the 1088 
spinners did in 1829. If manual labor had increased in 
the same proportion as productive force, the number of 
spinners ought to have risen to 1848 ; improved machinery 
had, therefore, deprived iioo workers of employment. 

We know beforehand the reply of the economists — 
the people thus thrown out of work will find other kinds 
of employment. Dr. Bowring did not fail to reproduce 
this argument at the Congress of Economists. But 
neither did he fail to contradict himself. In 1833, Dr. 
Bowring made a speech in the House of Commons upon 
the 50,000 hand-loom weavers of London who had been 
starving without being able to find that new kind of 
employment which the free traders hold out to them in 
the distance. Let us hear the most striking portion of 
this speech of Mr. Bowring. 



3^ FREE TRADE 

"The misery of the hand-loom weavers," he says, "is 
the inevitable fate of all kinds of labor which are easily 
acquired, and which may, at any moment, be replaced 
by less costly means. As in these cases competition 
amongst the work-people is very great, the slightest 
falling-off in demand brings on a crisis. The hand- 
loom weavers are, in a certain sense, placed on the bor- 
ders of human existence. One step further, and that ex- 
istence becomes impossible. The slightest shock is suf- 
ficient to throw them on to the road to ruin. By more 
and more superseding manual labor, the progress of me- 
chanical science must bring on, during the period of 
transition, a deal of temporary suffering. National well- 
being cannot be bought except at the price of some indi- 
vidual evils. The advance of industry is achieved at 
the expense of those who lag behind, and of all discov- 
eries that of the power-loom weighs most heavily upon 
the hand-loom weavers. In a great many articles for- 
merly made by hand, the weaver has been placed hors de 
combat; and he is sure to be beaten in a good many more 
fabrics that are now made by hand." 

Further on he says : "I hold in my hand a correspond- 
ence of the governor-general with the East India Com- 
pany. This correspondence is concerning the weavers of 
the Decca district. The governor says in his letter: *A 
few years ago the East India Company received from six 
to eight million pieces of calico woven upon the looms of 
the country. The demand fell off gradually and was 
reduced to about a million pieces. At this moment it has 
almost entirely ceased.' Moreover, in 1800, North Amer- 
ica received from India nearly 800,000 pieces of cotton 
goods. In 1830 it did not take even 4000. Finally, in 
1800 a million of pieces were shipped for Portugal; in 
1830 Portugal did not receive above 20,000. 



FREE TRADE 37 

"The reports on the distress of the Indian weavers are 
terrible. And what is the origin of that distress? The 
presence on the market of EngUsh manufactures, the pro- 
duction of the same article by means of the power-loom. 
A great number of the weavers died of starvation; the 
remainder have gone over to other employment, and chiefly 
to field labor. Not to be able to change employment 
amounted to a sentence of death. And at this moment 
the Decca district is crammed with English yarns and 
calicoes. The Decca muslin, renowned all over the world 
for its beauty and firm texture, has also been eclipsed by 
the competition of English machinery. In the whole his- 
tory of commerce, it would, perhaps, be difficult to find 
suffering equal to what these whole classes in India had 
to submit to." 

Mr. Bowring's speech Is the more remarkable because 
the facts quoted by him are correct, and the phrases with 
which he seeks to palliate them are characterized by the 
hypocrisy common to all free trade discourses. He 
represents the workers as means of production which 
must be superseded by less expensive means of produc- 
tion, pretends to see in the labor of which he speaks a 
wholly exceptional kind of labor, and in the machine 
which has crushed out the weavers an equally excep- 
tional kind of machine. He forgets that there is no kind 
of manual labor which may not any day share the fate 
of the hand-loom weavers. 

" The constant aim and tendency of every improve- 
ment of mechanism is indeed to do entirely without the 
labor of men, or to reduce its price, by superseding the 
labor of the adult males by that of women and children, 
or the work of the skilled by that of the unskilled work- 
man. In most of the throstle mills, spinning is now en- 
tirely done by girls of sixteen years and less. The in- 



38 FREE TRADE 

troduction of the self-acting mule has caused the dis- 
charge of most of the (adult male) spinners, while the 
children and young persons have been kept on." 

The above words of the most enthusiastic of free 
traders, Dr. Ure, are calculated to complement the con- 
fessions of Dr. Bowring. Mr. Bowring speaks of cer- 
tain individual evils, and, at the same time, says that 
these individual evils destroy whole classes ; he speaks of 
the temporary sufferings during a transition period, and 
does not deny that these temporary evils have implied 
for the majority the transition from life to death, and for 
the rest a transition from a better to a worse condition. 
When he asserts, farther on, that the sufferings of the 
working class are inseparable from the progress of in- 
dustry, and are necessary to the prosperity of the nation, 
he simply says that the prosperity of the bourgeois class 
presupposes as necessary the suffering of the laboring 
class. 

All the comfort which Mr. Bowring offers the workers 
who perish, and, indeed, the whole doctrine of compen- 
sation which the free traders propound, amounts to 
this : — 

You thousands of workers who are perishing, do not 
despair! You can die with an easy conscience. Your 
class will not perish. It will always be numerous enough 
for the capitalist class to decimate it without fear of an- 
nihilating it. Besides, how could capital be usefully ap- 
plied if it did not take care to keep up its exploitable 
material, i. e,, the workingmen, to be exploited over and 
over again? 

But, then, why propound as a problem still to be solved 
the question: What influence will the adoption of 
free trade have upon the condition of the working 
class? All the laws formulated by the political econo- 



FREE TRADE 39 

mists from Quesnay to Ricardo, have been based upon 
the hypothesis that the trammels which still interfere 
with commercial freedom have disappeared. These laws 
are confirmed in proportion as free trade is adopted. 
The first of these laws is that competition reduces the 
price of every commodity to the minimum cost of pro- 
duction. Thus the minimum of wages is the natural 
price of labor. And what is the minimum of wages? 
Just so much as is required for production of the ar- 
ticles absolutely necessary for the maintenance of the 
worker, for the continuation, by hook or by crook, of his 
own existence and that of his class. 

But do not imagine that the worker receives only this 
minimum wage, and still less that he always receives it. 
No, according to this law, the working class will some- 
times be more fortunate, will sometimes receive some- 
thing above the minimum, but this surplus will merely 
make up for the deficit which they will have received 
below the minimum in times of industrial depression. 
That is to say that within a given time which recurs 
periodically, in other words, in the cycle which com- 
merce and industry describe while passing through the 
successive phases of prosperity, overproduction, stagna- 
tion, and crisis, when reckoning all that the working 
class has had above and below mere necessaries, we shall 
see that, after all, they have received neither more nor 
less than the minimum ; i. e., the working class will have 
maintained itself as a class after enduring any amount 
of misery and misfortune, and after leaving many 
corpses upon the industrial battle-field. But what of 
that? The class will still exist; nay, more, it will have 
increased. 

But this is not all. The progress of industry creates 
less and less expensive means of subsistence. Thus 



40 FREE TRADE 

spirits have taken the place of beer, cotton that of wool 
and linen, and potatoes that of bread. 

Thus, as means are constantly being found for the 
maintenance of labor on cheaper and more wretched 
food, the minimum of wages is constantly sinking. If 
these wages began by letting the man work to live, they 
end by forcing him to live the life of a machine. His 
existence has no other value than that of a simple pro- 
ductive force, and the capitalist treats him accordingly. 
This law of the commodity labor, of the minimum of 
wages, will be confirmed in proportion as the supposi- 
tion of the economists, free trade, becomes an actual 
fact. Thus, of two things one : either we must reject all 
political economy based upon the assumption of free 
trade, or we must admit that under this same free 
trade the whole severity of the economic laws will fall 
upon the workers. 

To sum up, what is free trade under the present con- 
dition of society? Freedom of Capital. When you have 
torn down the few national barriers which still restrict 
the free development of capital, you will merely have 
given it complete freedom of action. So long as you let 
the relation of wage-labor to capital exist, no matter 
how favorable the conditions under which you accom- 
plish the exchange of commodities, there will always be 
a class which exploits and a class which is exploited. It 
is really difficult to understand the presumption of the 
free traders who imagine that the more advantageous 
application of capital will abolish the antagonism be- 
tween industrial capitalists and wage-workers. On the 
contrary. The only result will be that the antagonism of 
these two classes will stand out more clearly. 

Let us assume for a moment that there are no more 
Corn Laws or national and municipal import duties^ 



FREE TRADE 41 

that in a word all the accidental circumstances which 
to-day the workingman may look upon as a cause of 
his miserable condition have vanished, and we shall 
have removed so many curtains that hide from his eyes 
his true enemy. 

He will see that capital released from all trammels 
will make him no less a slave than capital trammelled 
by import duties. 

Gentlemen ! Do not be deluded by the abstract word 
Freedom! Whose freedom? Not the freedom of one 
individual in relation to another, but freedom of Capi- 
tal to crush the worker. 

Why should you desire farther to sanction un- 
limited competition with this idea of freedom, when 
the idea of freedom itself is only the product of a social 
condition based upon free competition ? 

We have shown what sort of fraternity free trade 
begets between the different classes of one and the 
same nation. The fraternity which free trade would 
establish between the nations of the earth would not 
be more real. To call cosmopolitan exploitation univer- 
sal brotherhood is an idea that could only be engen- 
dered in the brain of the bourgeoisie. Every one of the 
destructive phenomena which unlimited competition 
gives rise to within any one nation is reproduced in 
more gigantic proportions in the market of the world. 
We need not pause any longer upon free trade 
sophisms on this subject, which are worth just as much 
as the arguments of our prize essayists Messrs. Hope, 
Morse, and Greg. 

For instance, we are told that free trade would 
create an international division of labor, and thereby 
give to each country those branches of production most 
in harmony with its natural advantages. 



42 FREE TRADE 

You believe perhaps, gentlemen, that the production 
of coffee and sugar is the natural destiny of the West 
Indies. Two centuries ago, Nature, which does not 
trouble herself about commerce, had planted neither 
sugar-cane nor coffee trees there. And it may be that 
in less than half a century you will find there neither 
coffee nor sugar, for the East Indies, by means of cheaper 
production, have already successfully broken down this 
so-called natural destiny of the West Indies. And the 
West Indies, with their natural wealth, are as heavy a 
burden for England as the weavers of Decca, who also 
were destined from the beginning of time to weave by 
hand. 

One other circumstance must not be forgotten, namely, 
that, just as everything has become a monopoly, there are 
also nowadays some branches of industry which prevail 
over all others, and secure to the nations which espe- 
cially foster them the command of the market of the 
world. Thus in the commerce of the world cotton alone 
has much greater commercial importance than all the 
other raw materials used in the manufacture of clothing. 
It is truly ridiculous for the free traders to refer to the 
few specialties in each branch of industry, throwing 
them into the balance against the product used in every- 
day consumption, and produced most cheaply in those 
countries in which manufacture is most highly devel- 
oped. 

If the free traders cannot understand how one nation 
can grow rich at the expense of another, we need not 
wonder, since these same gentlemen also refuse to under- 
stand how in the same country one class can enrich itself 
at the expense of another. 

Do not imagine, gentlemen, that in criticizing freedom 
of commerce we have the least intention of defining pro- 



FREE TRADE 43 

tection. One may be opposed to constitutionalism with- 
out being in favor of absolutism. 

Moreover, the protective system is nothing but a means 
of establishing manufacture upon a large scale in any 
given country, that is to say, of making it dependent upon 
the market of the world ; and from the moment that de- 
pendence upon the market of the world is established, 
there is more or less dependence upon free trade too. 
Besides this, the protective system helps to develop free 
competition within a nation. Hence we see that in coun- 
tries where the bourgeoisie is beginning to make itself felt 
as a class, in Germany for example, it makes great efforts 
to obtain protective duties. They serve the bourgeoisie 
as weapons against feudalism and absolute monarchy, as 
a means for the concentration of its own powers for the 
realization of free trade within the country. 

But, generally speaking, the protective system in these 
days is conservative, while the free trade system works 
destructively. It breaks up old nationalities and carries 
antagonism of proletariat and bourgeoisie to the utter- 
most point. In a word, the free trade system hastens 
the Social "Revolution. In this revolutionary sense alone, 
gentlemen, I am in favor of free trade. 



VALUE, 
PRICE, 

AND 

PROFIT 



From a Mechanical Standpoint 

It is the first one of Marx's works 
published In America that can be 
looljed upon as a careful piece of 
publishing. It is to be hoped that 
this excellent volume is the fore- 
runner of other volumes of Marx, 
and that America will have the 
honor of publishing an edition 
that is accurate as to text, thor- 
ough in annotations, convenient 
in size, and presentable In every 
way. The present bootc will de- 
light the lover of Marx, and every 
Socialist will desire a copy of It. 
— N. Y. Daily People. 



By Karl Marx. Edited by his daughter Eleanor Marx 
AvELiNG. With an Introduction and Annotations by Lucien 
Sanial. 

THIS book is especially timely, like everything else that Marx 
wrote. Written a couple of years before his "Capital" 
appeared, it is an address to workingmen, and covers in 
popular form many of the subjects later scientifically 
expanded in "Capital." 

Lucien Sanial says of it: "It Is universally considered as the 
best epitome we have of the first volume of 'Capital,' and as such, 
is invaluable to the beginner in economics. It places him squarely 
on his feet at the threshold of his inquiry ; that is, in a position 
where his perceptive faculties cannot be deceived and his reasoning 
power vitiated by the very use of his eyesight; whereas, by the 
very nature of his capitalist surroundings, he now stands on his 
bead and sees all things inverted." 

Special interest attaches to what Marx says relative to strikes. 
Were the working Class thoroughly acquainted with the subject 
matter of this little work, we should hear no more of the "common 
ground" on which capital and labor might meet to settle their 
differences. 

The thousand and one schemes that are daily being flaunted in 
the faces of the working class by the lieutenants of the capitalists 
show the necessity there is on the part of the working class for 
a comprehensive understanding of the matter of wages, the relation 
of the wage worker to the employer, the source of profits, and the 
relation between profits and wages. These and other subjects are 
here presented, and so clearly does Marx present them that all he 
has to say can be understood by any person willing to pay close 
attention to his words. 

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The . . . . 
SOCIALIST 
ALMANAC 



The monographs on Italy and Spain 
are especially instructive. They trace 
to its origin the long and mortal strug- 
gle between anarchism and social- 
ism, the former of which, fathered by 
the sophist Proudhon and brought 
forth in agony by a middle class finan- 
cially and morally bankrupt, had fas- 
tened itself to the international pro- 
letariat. — Introduction to "Socialist 
Almanac." 



A BOOK THAT EVERY WORKINGMAN SHOULD READ. 

By LuciEN Sanial, formerly editor of "The People," the 
official organ of the Socialist Labor Party. A handbook 
on the history and economics of Socialism. Prepared 
under the direction of the National Executive Committee 
of the Socialist Labor Party. 

The Science of Modern Socialism is based upon facts. To present this 
Science, the Socialist must be equipped with the facts upon which it rests, 
while he who would attempt to refute the Science must also be equipped with 
those facts. With the object of making these facts easily accessible to friend 
and foe alike, the National Convention of the Socialist Labor Party held in 
1896 instructed the National Executive Committee to have prepared a book 
which would contain the data necessary for the successful propaganda of 
Socialism, and at the same time give the American people a reliable history of 
International Socialism. Lucien Sanial, of New York City, was directed to 
proceed with the work. It required two years of labor to collect and arrange 
the data. Upon the completion of his task the book was issued with the title 
"The Socialist Almanac," a stout volume of 230 pages. 

The first part of "The Almanac" is historical, and gives a detailed 
history of Socialism in the various countries of Europe from its incipiency 
down to the present day. The second part consists of instructive theoretical 
and statistical articles on every subject connected with capitalism and the 
working class. This second part is truly a mine of information for the 
workingman. It contains a vast amount of valuable information, which no 
one could obtain but at an enormous expense of time and labor in tedious 
research through ohicial and other documents not readily accessible. Every 
workingman and every student should have a copy of the Socialist Almanac. 
It is authority in all disputes, and will settle every argument. 

230 Pages. Price, 50 cents. 

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containing the Platform and Constitution of the Party, and 
numerous historic and official documents relative to the late 
conspiracy to wreck the Party. 

This book is a remarka'bly interesting and instructive contribution 
to current literature on the Labor Movement. Realizing that the 
Social Revolution can be brought about only by the use of political 
power wielded by the class that seeks its own emancipation, the 
Socialists are organized in a political party— the Socialist Labor 
Party— in order that they may achieve the conquest of that po- 
litical power. The national conventions of the party are held every 
four years. The convention held in 1900 was doubly interesting 
owing to the reactionists who happened to get intO' the party 
having organized about a year preceding the convention, a con- 
spiracy to sidetrack the party from the course prescribed for it by 
the Class Struggle. The conflict was a fierce one for a while, and 
ended In the utter rout of the "Kangaroos," as the conspirators 
were called. The report of the National Executive Committee, 
which makes up sixty pages of the Proceedings, details in an in- 
teresting manner the progress of the party since the 1896 conven- 
tion, and makes public a good deal of inside information relative to 
tihe Kangaroo conspiracy. 

For a week the representatives of the Socialist proletariat of the 
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for emancipating the working class from the thraldom of capi- 
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The debates are concise, to the point, and typify the party whose 
emblem is the Arm and Hammer. 

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• THE — — • 

Eighteenth Bramaire of Ims Bonaparte 

BY KARL MARX. 
Traaslated by DANIEL DB Li^N for the SecfalUt Labor Party. 

"Th« Ei€rht©enth Brosaaire of Louis Bonaparte" Is one of KBri 
Marx's moat profound and briBiant monographs. It may be cfmad- 
ered ^e best work extant oo the philosoipby ctf history, eepw^BOly ©a 
the history of the Movement of the ProieUviat, t«Y^^» witti ^ 
Ixmrgeois manifesations that acowiii)aray the Mune, and tie tactics 
that such oonditiona dictata 

The recent PopuHsrt uprt^ag, the more rect»at •'B^to Mefv^aent," 
the thousand and one Utopian and chimerical n^iiosia that are flariBS 
up, the ca^taiiat Bmaoeuvres, the hopeiess, he^idess gra^dsir after 
straws that cdtaracterlz^ the conduct of t^e bulk of the Working CSass 
—all o€ these, together witb the empty-headed, ominous figures that 
are si^faa^in^ into a^torlety for a time, and have thetr day, mark the 
present period of the Labor Movement in the United States a o-itical 
one. The beet informatUm acqulra.ble, and the best mental trai nin g ob- 
tainable, are requisite to steer through the existing chaoo that the 
death-tainted social system of to-day creates all around us. To aid In 
this needed information and m^ital training, this iiMtructive work by 
Marx is naade accessible to Snglish readers, and is reconameaded te 
the serioos study of the serious. 

For the assistance of those who are unfamiliar with the Ustory of 
Prance, and who miglit therefore be confused by soane of the tenms 
used by Marx, the fodlowing explanations may prove timely: 

0« the 18th Brumalre, (November 9, 1799,) the 4evelofHnent ot af- 
fairs in France enalded Napoleon Bonaparte to take the step that led 
with inevitable certainty to the imperial throne. The circumstances 
that, fifty y^urs later, aided his nephew, Louis Bonaparte, to take a 
similar step with a similar result, gives the nanae to this work^'The 
£}^bteenth Bnm^dre of Louis Bonaparte." . ^ 

Upon the overthrow of the first Napoleon came the restoration of 
the Bourbon throne— Louis XVIIL, succeeded by Charles X. In July, 
1830, an t^wislng of the upper tier of the capitalist da^ (the artsto^aacy 
<rf finance) overthrew the Bourbon throne and set up the throne of 
Orleans, a younger branch of the House of Bourbon, with Louis 
Philipi>e as king. From the month in which this revolution occurred, 
Louis Philippe's monarchy is called the "July Monarchy." In Febru- 
ary, 1848, a revolt of the lower tier of the capitalist class (the "in- 
dustrial bourgeoisie") against the aristocracy of finance dethroned 
Louis Philippe. This affair, also named fix>m the month in which it 
took place, iis called the "February Revolution." And the "Eighteenth 
Brumalre of Louis Bonaparte" starts'wlth the "February Revolution." 

Despite the in<applicableness to America of the political names 
and political leaderships described In the "Eighteenth Brunaalre," both 
these names and leaderships are to such an extent the product of an 
economic-social development that has taken place in the Ui^ted States 
with even greater sharpn€a5S than In France, and have, likewise, their 
real or threat«ied counterparts here so completely, that by this w<M-k 
Of Marx we are best enabled to understand our own history, to know 
whence we ooumi, whither we are going, and how to conduct ourselv«a. 

78 Paqks. The Fbontisfiegs is a Pictubk or Marx. 
Price. 25 Cents. 



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Reform or Revolution? A lecture delivered at Boston, Mass., by Daniel 
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Socialism. By William Scholl McClure. A lecture delivered before 
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The Worlcing Class. Translated from the German and adapted to America 
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The Capitalist Class. Translated from the German and adapted to America 
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The Socialist Republic. Translated from the German and adapted to Amer- 
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The New Trusts, the fliddle Class, German Trade Unionism. B> 

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Manifesto of the Communist Party. By Karl Marx and Frederick 
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